Vodafone to spin-off towers into standalone business by May 2020

Following in the footsteps of Middle East operators such as Zain and Etisalat, Vodafone, Europe’s largest mobile operator, is putting into motion plans to spin-off its pan-European mobile tower business, in a process that could see the standalone company established as early as May 2020.

Vodafone intends to monetise a substantial proportion of the new entity, TowerCo, within the next 18 months and this effort may include a potential flotation on the stock market, the sale of a minority stake in the whole business or in its tower operations in individual countries.

TowerCo will comprise 61,700 towers across 10 countries, with 75% of the sites located in key European markets of Germany, the UK, Italy and Spain. It is forecast the business will generate annual revenues in the region of €1.7 billion (US$1.9 billion) and €900 million in profits, leading analysts to value the business at between €15-20 billion.

Mobile operators the world over have been struggling to grow revenues for years, and in a bid to do so, have become more open to opportunities to unlock embedded value in their operations. Vodafone recently reported that for the three months to end-June, year-on-year revenue was down 2%.

Vodafone began evaluating a spin-off of the towers business last year, having received several offers for various parts of its portfolio.