Tower sales are back in the news. This time an operator is selling its towers in Russia to a company keen to expand its infrastructure portfolio – and making just under a billion dollars from the deal.
Veon, a leading global provider of connectivity and internet services, has announced that it has reached agreement to sell its mobile network towers in Russia to Service-Telecom for a total consideration of about $970 million.
Service-Telecom is a partner to PJSC VimpelCom, which operates in Russia under the Beeline brand, and already provides the company with passive infrastructure across various regions in Russia.
The partners say that the sale reflects Veon’s continued focus on active portfolio management and the pursuit of opportunities to realise the value of its infrastructure portfolio. Veon says it has over 50,000 towers across nine markets – one of the industry’s largest such portfolios.
The transaction involves the sale of 100 percent of National Tower Company, a subsidiary of Veon, which operates a portfolio of approximately 15,400 mobile network towers in Russia. All of the active mobile network infrastructure currently operated by PJSC VimpelCom and the majority of the rooftop towers will remain with the company.
Under the terms of the deal, PJSC VimpelCom and Service-Telecom have entered into a long-term master agreement regarding the provision of tower infrastructure services for an initial period of eight years, and multiple extensions of eight years at the discretion of PJSC VimpelCom. Both parties will additionally enter into a new build-to-suit programme comprising up to 5,000 sites by 2029.
As you might expect, Kaan Terzioğlu, Veon’s Chief Executive Officer, highlighted the business benefits of the deal, saying: “This transaction allows us to release the capital to deleverage Veon’s balance sheet and invest in critical aspects of active network and digital opportunities while achieving more financial flexibility.”