Vodafone hopes to raise €2.58 billion (£2.2bn) from the floatation of its European tower subsidiary on the Frankfurt Stock Exchange.
Vantage Towers was created in 2019 with the intention of providing infrastructure services to other operators and attracting third party investment.
Earlier this year, Vodafone and O2 agreed to add their shared towers in the UK to Vantage’s portfolio, bringing the total number of sites under its control to more than 82,000 across ten countries.
Vantage Towers IPO
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. An independent operator would also be able to agree deals with multiple operators, increasing revenues.
Vantage Tower’s floatation will be one of the biggest in Europe this year and hopes the promise of long-term revenues linked to inflation will attract investors. Naturally, Vodafone is an anchor tenant, but other customers will be tied to multi-year contracts.
According to Bloomberg, two investment firms will buy almost €1 billion worth of stock in Vantage, which is valued at up to €14.7 billion (£12.6bn). If the IPO attracts the high end of the price range and Vodafone exercises all its share options, it could generate up to €3.6 billion.
Vodafone, which is investing heavily in fibre and 5G infrastructure, will use the proceeds to reduce its debt.
Three’s parent company recently agreed to sell its European mobile mast network for €10 billion to Spanish firm Cellnex, which has assembled a vast array of infrastructure assets over the past year.