Vodafone could look to secure an IPO for a minority stake in the new company next year

Vodafone is to create a new company to manage its portfolio of 61,700 telecoms towers, which will be operational by May 2020, according to a company statement.

TowerCo, as the new company will be known, will take over the management of Europe’s largest telecoms tower portfolio of 61,700 towers in 10 distinct markets.

“Building on our position as Europe’s largest converged operator, we are now creating Europe’s largest tower company. Given the scale and quality of our infrastructure, we believe there is a substantial opportunity to unlock value for shareholders while capturing the significant industrial benefits of network sharing for the digital society. We are focussed on executing this strategic priority over the next 18 months," said Vodafone’s chief exec, Nick Read.

Over 75 per cent of the towers owned by TowerCo will be in Vodafone’s key markets of Germany, Italy, Spain and the UK.  

Vodafone estimates that TowerCo could generate proportional annual revenues of around €1.7 billion. EBITDA is expected to reach €900 million in its first year of operation.

Vodafone will aim to monetise the creation of TowerCo through an IPO, most likely for a minority stake, at some point over the next 18 months.

Vodafone intends to use the proceeds from the sale programme to reduce its levels of debt, creating more economic headroom for it to operate in as it looks to beef up its 5G deployments across Europe.

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