Three is reportedly considering whether to capitalise on the growth recent demand for telecoms infrastructure by selling some of its masts to a third party.
There has been a flood of investments in the sector by private equity firms in recent years because of the predictable, stable revenues promised by assets such as fibre networks and mobile masts. Meanwhile demand for ultrafast broadband and 5G means there is scope for growth.
This long-term view contrasts with the short-term pressures that network investment imposes on mobile operators who are in the middle of expensive network builds.
Three mast sale
The Telegraph says several parties are interested in a move that could generate billions for parent CK Hutchison, help fund the rollout of 5G, and potentially open the door for a merger with a rival in the future.
In addition to masts, the package could include the rights to build antennas on Greene King pubs (the pub firm has been owned by CK Hutchison since 2019) and on hundreds of city rooftops, the rights to which were included in the 2017 purchase of UK broadband.
One of the trickiest elements of the deal could be Three’s withdrawal from MBNL – a network infrastructure sharing arrangement with BT that dates back to the days of T-Mobile. However, the report suggests that BT might be willing to agree so it can also raise funds for network construction.
The end of MBNL would also remove one of the biggest obstacles to a potential merger. Three’s proposed £10.25 billion combination with O2 was blocked by the European Commission (EC) because the enlarged firm would have an interest in both MBNL and Cornerstone – a similar arrangement between O2 and Vodafone.
Although Three has since successfully appealed that ruling, it could be easier to team up with another operator if MBNL was not a factor as the threat to competition at an infrastructure level would be significantly reduced.
O2 is now in the process of combining with Virgin Media but it is speculated that Vodafone could be a potential bedfellow in the long-term.
Fibre network builders CityFibre, Hyperoptic and KCOM have all been bought in the past two years, while even Openreach was said to be considering overtures from investors earlier this year.
Arqiva, the UK’s largest independent mast operator, sold its assets to Spain’s Cellnex earlier while Vodafone has spun off most of its European tower assets into a separate entity and is planning an IPO for 2021. It has entered into joint-ventures in Italy and Greece, while a recent expansion to Cornerstone will allow for greater monetisation in the UK.
Three declined to comment to TechRadar Pro.
Via The Telegraph