LONDON (Reuters) – the uk’s Vodafone, will be separate from the mobile mast (s) in the european union in the new company worth up to 18 billion euros ($20 billion), with a view to the admission to listing of any non-controlling interest.
With the announcement of the plan on Friday, Vodafone said the move would unlock value for shareholders and reduce the debt.
Shares in the world’s second-biggest mobile operator, rose as much as 10% on the news, at 145 pence, putting them on track for their best daily rise since 2002, with the aim of all of the ground lost when the company cut its dividend for the first time in May.
Chief Executive Nick Read said, as a stand-alone towers, a company would be open to the high value of the infrastructure at a time when the tower steps are very, very attractive”.
The unit would be composed of 61,700 sites in 10 markets, of which 75% in Germany, Italy, Spain, and the united Kingdom, and the annual proportionate revenue of 1.6 billion euros, and at the heart of the profit of 900 million euros per year.
It would have to catch up Cellnex, but now it is one of Europe’s largest tower of the group, which is estimated at a little over 17 times earnings.
Read told the analysts, there was a lot of to invest in Vodafone’s infrastructure, the discussions with investors indicate the assets might be able to achieve the values of a, to the north of 20 times earnings, which would equate to a value of more than € 18 billion.
Vodafone is, of course, is of a very high quality tenant and we have a very high quality of its assets, and such opportunities do not come around often,” he said. “The people are very eager to practice with us.”
Mobile operators in Europe to sell parts of their network infrastructure and cut the debt, tapping into the appeal of assets with stable cash flows to investors.
Read: the proceeds of the listing will have a controlling interest, or to attract other investors, will be used for the cutting of Vodafone’s debt, which stood at 27 billion euros on the 31st of March.
Vodafone and all of the shares of the network infrastructure, Telefonica’s O2 in Britain and Orange in Spain, and, on Friday, completed an agreement in Italy with Telecom Italia’s tower-a unit of INWIT.
The stakes in these joint ventures, will be rolled into the new company, which will be up and running, it May be by the year 2020.
Together with other operators, has selected the next-generation mobile services to be rolled out faster and at a lower cost.
“This is an opportunity to 5G is to launch in the market,” Read told reporters.
Cellnex said on Friday it was not going to get you to invest in the publicly traded tower companies.
On Friday, the Italian’s deal for the German left, as Vodafone is the only major market without a network-sharing agreement, in a situation in which the Read address, after the EU cleared its acquisition by Liberty Global, which has cable networks in the country in the last week.
Vodafone would have to talk to the players in the market, ” he said, adding that the Deutsche Telekom landline network, such as Telecom Italia, said its vision is to build a network of high-quality.
Deutsche Telekom and Telefonica Deutschland, said in October of last year, they will expand their network of collaboration in the race to 5G, with the User to connect up to 5,000 of the Collection’s base stations to its fibre network.
Deutsche Telekom has also carved out their own towers as a unit, Deutsche Funkturm, which runs a portfolio of 29,000 cellular network. A spin-off of the towers, has for a long time, been proposed, but has yet to come.
A TURNING point
Vodafone reported on Friday that first quarter group service revenue fell by a smaller-than-expected 0.2%. It is said to be a gradual recovery in the weak top-line is here to stay.
“We are now at a turning point in our service revenue, after the low point in the 4th quarter of the previous fiscal year,” Read told reporters. “We are confident that this improvement in the service revenues will continue as the year goes on.”
Analysts at Citi, who has a “buy” rating on Vodafone, said that the improved top line and make the decision to separate it from the window and take a look at how to generate revenue should be looked at.
FILE PHOTO: A woman holds a phone and they go down to a Vodafone store in London, Britain, 16 May, 2017. REUTERS/Neil Hall/File Photo
Vodafone said that conditions in Italy continued to improve and the growth in the retail sector in Germany continued to be strong, which in part was offset by the intense competition in Spain.
The company has launched new price plans and products in the area than any that he could remember, including the next-generation 5G services in its major markets.
He said Vodafone was confident about its outlook for the year to adjusted core income of 13.8 billion euro 14.2 billion euros and the free cash flow generation before spectrum costs from a minimum of 5.4 billion euros, ‘ Read said.
Additional reporting by Isla Binnie in Madrid, spain and Douglas Busvine in Frankfurt; Editing by Guy Faulconbridge/Mark Potter and Susan Fenton