TX MeetupEuropeProspectus 2016

Tuesday 12 and Wednesday 13 April, Business Design Centre, London
Meetup Europe 2016

A unique networking opportunity with 200 leaders of the European telecom and broadcast tower industry
To discuss your participation, contact Annabelle on +44 7423 512588 or email amayhew@towerxchange.com
GOLD SPONSOR: Silver Sponsors: Bronze sponsors: Exhibitors: Endorsed by:
Organised by:
The unique experience of a TowerXchange Meetup
Personal development
< Learn from 200+ peers, the leaders of the European tower industry Experience
< Align your role and strategy with the needs of the ecosystem
< Networking
< Selective audience
Infrastructure focused < Curated exhibition
< Relax and enjoy
< Telecom towers
< Professionally hosted
< Broadcast towers
< Real estate
< Decommissioning
< Microcells and DAS Learning
< Monitoring
< Europe market forecasts
< I&C and O&M
< Q&A with the CEOs
< Round tables add insight
< Structured introductions
< Select your own agenda
< Local market knowledge
Insights
< Market transformation
< Next sale & leasebacks Connections
< BTS opportunities < Network sharing JV leaders
< Site upgrades < Towerco CXOs
< Energy opex reduction < MNO tower strategists
< Country specific round tables < Investors
< Strategic advisors
< Proven suppliers
For more information visit www.towerxchange.com/meetups/meetup-europe

TowerXchange Meetup Europe Agenda
London | April 12-13, 2016
Day One | Tuesday 12 April
8:00 Coffee and registration < Peter Egbertson, Director of Corporate Finance, 10:00 Energy management at European cell sites
Protelindo < Senior Representative, Heliocentris
9.00 Opening presentation and TowerXchange < Jack Dessay, Managing Director, Macquarie < Senior Representative, Medipower
analysis < Dany Rammal, Managing Director, EMEA,
Kieron Osmotherly, CEO, TowerXchange Providence Equity
Laura Dinnewell, Head of EMEA, TowerXchange 10:20 Coffee and networking
< Eric Crabtree, Chief Investment Officer, IFC
< Vincent Policard, Director of Energy & 10:50 Emerging European markets:
9:45 European towerco CXO panel – the big Infrastructure, KKR
picture < Moderator: Phil Cooper, Managing Director, EMEA,
< Moderator: Kieron Osmotherly, CEO, Digital Bridge
16:40 Improved monitoring, management and
TowerXchange efficiency at cell sites < Temel Oktem, Head of Telecom, Media & Technology,
< Scott Coates, CEO, Wireless Infrastructure Group < Senior Representative, Abloy Europe, Middle East and North Africa, IFC
< Frédéric Zimer, CEO, FPS Towers < Senior Representative, Acsys < Sergey Plissak, Commercial Director, Logycom Group
< Peter Owen Edmunds, Chairman, Russian Towers < Senior Representative, Invendis < Sachit Ahuja, Vice President, Business Development,
< Nicolas Ott, Managing Director, Telecoms, Arqiva < Senior Representative, Siterra, an Accruent Product Tillman Global Holdings
< Senior Representative, Tarantula < Arthur Akopyan, Managing Director & Partner, UFG
10:30 Broadcast assets & JV infracos in the Asset Management
telecoms mix 17:00 End of day one and networking drinks < Zafer Ozbay, General Manager, UkrTower
< Moderator: Marco Cordoni, Senior Partner, < Georgy Chumburidze, CEO, Vertical
Analysys Mason 19:30 TowerXchange optional dinner
< Stefano Ciccotti, CEO, Rai Way 11:30 Roundtable session 3
< Malcolm Collins, CEO, CTIL
< Nikos Babalis, CEO, Victus Networks Day Two | Wednesday 13 April 12:30 Networking lunch
11:15 Coffee and networking 8:30 Welcome coffee and breakfast hosted by FPS
Towers 13:40 Roundtable session 4
11:45 Roundtables session 1
9:00 Keynote interview with Europe’s most 14:40 Coffee and networking
12:45 Networking lunch acquisitive towerco
< Interviewer: Enda Hardiman, Managing Partner, 15:40 Small cells, DAS & heterogenous networks:
14:10 Roundtable session 2 Hardiman Telecommunications < Moderator: Caroline Gabriel, Research Director &
< Interviewee: Tobias Martinez, CEO, Cellnex Co-Founder, Rethink Technology Research
15:10 Coffee and networking < Scott Coates, CEO, Wireless Infrastructure Group
9:20 Tower divestments, carve outs and M&A < Alexandre Mestre, International Business &
15:40 Towerco investment, growth & exit < Moderator: Alexandre Lucas, Executive Director, Marketing Director, Cellnex
strategies TMT Investment Banking, Goldman Sachs < Nicolas Ott, Managing Director, Telecoms, Arqiva
< Moderator: Gaurav Bath, Global Communications < Alexander Chub, President, Russian Towers < Representative, Small Cell Forum
Group, Citi < Colin Cunnigham, Managing Director, Cignal
< Jack Colbourne, Partner, Arcus Infrastructure < Petr Slováček, CEO, CETIN
16:40 End of Meetup
Partners < James MacLaurin, Director, Axiata
www.towerxchange.com/meetups/meetup-europe | TowerXchange Meetup Europe 2016, 12-13 April, London | 3

TowerXchange roundtables
Strategic sourcing: what and how Europe’s tower
owners buy to improve energy efficiency
< Solange Karwera, Senior Category Manager,
Network Site Infrastructure, Vodafone
Opportunities for towercos in small cells & DAS

< Scott Coates, CEO, WIG
Roundtable session 2: 14:10-15:10, 12 April
Sourcing capital in Russia & the CIS

< Arthur Akopyan, Managing Director & Partner,
UFG Asset Management
Country Focus: Germany

< Jonathan Dann, Managing Director, Telecom
Research, RBC Capital Markets
Roundtable session 1: 11:45-12:45, 12 April European MNO consolidation: rumours, deals &
drivers
Country Focus Ireland
Country focus Russia < Andrew Doyle, Managing Consultant, PA
< Alexander Chub, President, Russian Towers < Morag Pollock, GM, Towercom
Consulting
< Peter Owen Edmunds, Chairman, Russian Towers
What do you need to know about ground lease
Growing and scaling a towerco
Country Focus: Greece aggregation?
< Peter Egbertsen, Director of Corporate Finance,
< Nikos Babalis, CEO, Victus Networks < Bill Bates, International Business Development,
Protelindo SBA Communications
Country Focus: France
How to ensure a successful IPO RAN sharing - threats and opportunities
< Cedric Lepolard, CFO, FPS Towers
< Julian Plumstead, Managing Director, Rothschild < Cedric Lepolard, CFO, FPS Towers
Decommissioning: Can it create value within an < Pierre Cassier, Commercial Director, FPS Towers
acceptable timescale? Why is Europe different, how to be a successful
< David Bernal Cantero, Director of Business towerco as markets mature? Towerco valuations in Europe
Development, Cellnex < Justin Speake, President, EuroTower < Host TBC
4 | TowerXchange Meetup Europe, 12-13 April, London | www.towerxchange.com/meetups/meetup-europe

TowerXchange roundtables
Making the most of synergies between broadcast African market focus Country Focus Turkey
and telecoms < Terry Rhodes, Co-founder & Director, Eaton < Cihan Nazmi Biyikli, Executive Business
< Nicolas Ott, Managing Director, Telecoms, Arqiva Towers Management and Strategy Consultant and former
Chairman, Global Tower
Best practices in corporate governance and How to carve out infrastructure assets from an
MNO Country Focus: Netherlands
risk management for telecom infrastructure
< Petr Slováček, CEO, CETIN < Frank van Kuppeveld, Commercial Director,
businesses
Novec
< Belinda Fawcett, General Counsel, CTIL < Randolf Nijsse, Open Tower Company
A comparison of neutral host DAS and multi-
tenant small cell vendors and how to design a
Benchmarking tower efficiencies against best Country Focus: Czech Republic
heterogeneous network attractive to multiple
practice tenants < Conor Plant, Managing Consultant, Hardiman
< Host TBC < Representative, Small Cell Forum Telecommunications
Subcontractor performance management Change management: transitioning people and

Creating a tower value add to remain a core asset
processes to meet the unique requirements of
< Egor Bykov, Head of Strategy, Vertical < Ronnie Horan, Infrastructure Manager, ESB
the commercial tower business
Telecoms
< Ravi Kuppan, Founder and Director, Tarantula
Roundtable session 3: 11:30-12:30, 13 April
TowerCo – Public equity, private equity or
Tower transaction deal structures & terms
Country focus Spain infrastructure opportunity?
< Daniel Lee, Managing Director, Intrepid Advisory
< Jorge Alberto Jimenez, President, Axion < Julian Plumstead, Managing Director, Rothschild
Partners
From tactical to strategic sourcing of deployment Minimising costs in the strengthening of towers
Regional focus: CIS
services for additional operator equipment
< Temel Oktem, Head of Telecom, Media &
< Ahmed Saeb, Principle Category Manager, < Host TBC
Technology, Europe, Middle East and North
Networks SCM Technology, Vodafone
Africa, IFC
Country Focus Romania
Roundtable session 4: 13:40-14:40, 13 April < Temel Oktem, Head of Telecom, Media &
Country Focus: Poland
Technology, Europe, Middle East and North
< Darragh Stokes, Managing Partner, Hardiman Country focus Italy Africa, IFC
Telecommunications < Carlo Ramella, Chairman, EI Towers
How to monetise a JV infra-sharing firm
Regional Focus: Scandinavia Country focus UK < Tim Devine, Member of Management Group,
< Henrik Kamstrup, Partner, KPR Consult < Malcolm Collins, CEO, CTIL PA Consulting

Latest attendee list for TowerXchange Meetup Europe 2016
Vodafone Procurement Company, VP Global SCM FPS Towers, Commercial Director
Services Grupo TorreSur, Chairman and Chief Executive Officer
Helios Towers Africa, Executive Chairman
Towercos, Broadcast Towercos and JV Infracos Hibernian Towers, Company Director
American Tower Germany, CEO Hibernian Towers, Company Director
Arqiva, Product and Technology Director IHS, Associate Communications Director
Arqiva, Managing Director - Telecoms Division IHS, Chief Commercial Officer
Axion, President IHS Rwanda Ltd, NOC Operater
Cellnex, CEO Konsing Group, CEO
Cellnex, International Business and Marketing Director Konsing Group, CTO
Cellnex, M&A Manager, Business Development Link Development, CEO
Direction Logycom Group, Commercial Director
Cellnex, Corporate and Public Affairs Director MBNL, Managing Director
Cellnex, Deputy Manager MBNL, Finance Director
CETIN, CEO Norkring AS, CEO
Cignal, Managing Director NOVEC, Commercial Director
Cignal, Chairman Open Tower Company, General Counsel
CTIL, CEO Open Tower Company, Managing Partner
Mobile Network Operators CTIL, Finance Director Protelindo, Director
Deutsche Telekom, Vice President CTIL, General Counsel Protelindo, Corporate Finance
Deutsche Telekom, VP M&A Deutsche Funkturm, Head of Geodata Management Rai Way, CEO
Dialog Axiata, Director Digita Oy, CEO Rai Way,, General Director
EE, Senior Property Manager Eaton Towers, CEO Russian Towers, Co-Founder
MegaFon, CTIO EI Towers, Chairman Russian Towers, President
TalkTalk, Director of Small Cell Technology EI Towers, Director of Institutional Affairs Russian Towers, Chairman
Telefonica, Head of Infrastructure Efficiency EmiTel, CEO SBA Communications, International Business
Turkcell, Merger and Acquisition & Investor Relations EmiTel, CFO Development
Member at Tu EmiTel, Vice President Shared Access, CEO
Ufone PTML, Senior Manager Finance ESB Telecoms Ltd, Infrastructure Manager Shere Group Ltd, Managing Director
Vimpelcom, Chief Business Development & Portfolio EuroTower, President Shere Masten BV, General Manager
Officer FPS Towers, COO TDF, Group Deputy CEO/Group CFO
Vimpelcom, Group Director, Business Development FPS Towers, CFO TDF, Strategy & Development Director
Vodafone Procurement Company, Head of Sales FPS Towers, CEO Teracom Boxer Group, VP Network Enterprise

Latest attendee list for TowerXchange Meetup Europe 2016
Teracom Boxer Group, Head of Strategy & Business Goldman Sachs, Senior Representative Delmec Engineering Ltd, CTO
Development International Finance Corporation (IFC), Chief Delmec Engineering Ltd, CEO
Towercom Ltd, Chief Executive Officer Investment Officer Dialight, Director Sales
Towercom Ltd, General Manager International Finance Corporation (IFC), Head of Electronic Control Systems, President
Towercom Ltd, New Business Development Manager Telecom, Media & Technology, EMEA EnerSys EMEA, Director - Reserve Power EMEA
UkrTower, General Manager KKR, Director, Energy & Infrastructure EnerSys EMEA, VP Sales & Marketing - Reserve Power
Vertical, CEO Macquarie, Managing Director, TMT EMEA
Vertical, Strategy Director Macquarie Infrastructure and Real Assets, Managing Ericsson AB, Strategic Product Management Energy &
VICTUS Networks, CEO Director Enclosure
Wireless Infrastructure Group, CEO Och-Ziff, Managing Director GSM Telecom Products
Wireless Infrastructure Group, COO Providence Equity, Managing Director Hardiman Telecommunications, Managing Partner
Wireless Infrastructure Group, Director RBC Capital Markets, Managing Director Hardiman Telecommunications, Managing
Rothschild, Managing Director Consultant
Investors Tillman Global Holdings, VP Business Development Heliocentris, VP Sales and Marketing
4M Investments, Principal UFG Asset Management, Managing Director, Partner Intrepid Advisory Partners, Managing Director
7L Capital Partners, Partner Wood Creek, CEO Invendis, CTO
Alinda Capital Partners, Managing Director Wood Creek, Vice President Invendis, COO
Alinda Capital Partners, Director Wood Creek, Managing Director Medipower, CEO
AMP Capital Investors, Investment Director Medipower, Vice President
AMP Capital Investor, Investment Manager Other NorthStar, President, EMEA
Antin Infrastructure Partners, Managing Partner Abloy Oy, Managing Director NorthStar, Director, Solution Engineering
Alinda Capital Partners, Partner Abloy Oy, Business Development Manager ORION, Commercial Manager
Arcus Infrastructure Partners, Senior Investment ACSYS, COO PA Consulting, Managing Consultant
Director ACSYS, Business Development Director Global PA Consulting, Member of Management Group
Capital Group, Partner Accounts Redflow, Sales Manager Europe
Citi, Global Communications Group ACSYS, Head of Marketing Strategy Siterra, An Accruent Product, SVP Telecom Sales
Communication Infrastructure Fund, Managing Analysys Mason, Principal Standard Advisory London Limited, Global Head
Partner Analysys Mason, Senior Partner Telecoms, Media and Technology, Head, Financial
Credit Suisse, Director Bladon Jets, CEO Sponsor Coverage
Credit Suisse, Analyst Bladon Jets, VP Market Development Tarantula, Founder & Director
Crescent Park, Associate Cihan Nazmi Biyilki Education & Consultancy, Tarantula, Sales Director, Europe
Digital Bridge Holdings, Managing Director, EMEA Executive Business Management Vinson & Elkins, Partner
Goldman Sachs, Executive Director Coslight India Telecom Pvt Ltd, Director Willkie Farr & Gallagher, Partner

TowerXchange Investors club
Held at the TowerXchange Meetup Europe, 12-13 April 2016, Business Design Centre, London, UK
Globally, TowerXchange are tracking 166 towercos and 109 investors with investments active in or a proven appetite for the tower asset class. Our research and series
of eight by-invitation-only Meetups have become a valuable source of information for investors looking for new opportunities and in 2016 we are excited to launch the
TowerXchange Investors Club. The first edition of the Investors Club will be held on day two of the TowerXchange Meetup Europe in London on 12-13 April.
What is the TowerXchange Investors Club? Which towercos are already scheduled to attend? < What availability of local debt providers is there?
< How does the initial yield compare to that in other
Held to complement the baseline market information We anticipate attendance from over 85% of Europe’s markets?
shared during the TowerXchange Meetup roundtables, 67 towercos, broadcast companies and JV infracos. < What cash flow/ EBITDA multiples can be from
the TowerXchange Investor’s Club pre-arranges private Companies already scheduled to attend include: transactions now versus future exits?
one-to-one meetings between towercos and investors.
American Tower Germany, Arqiva, Axion, Cellnex, CETIN, *Country/ regional roundtables: CIS, Czech Republic, France,
These confidential meetings will give investors the Germany, Greece, Ireland, Italy, Netherlands, Poland, Russia,
opportunity to open dialogue with CXOs of Europe’s Cignal, CTIL, Deutsche Funkturm, EI Towers, Emitel, ESB Scandinavia, Spain, Turkey and the UK
towercos and assess potential new investment Telecoms, EuroTower, FPS Towers, Hibernian Towers,
opportunities in European telecoms infrastructure. Konsing Group, Link Development, Logycom Group, Open 20+ strategic roundtables will centre on topics
Tower Company, Protelindo, Rai Way, Russian Towers, including:
< How many towers do the company own? SBA Communications, Shared Access, Shere Group, TDF, < Towerco valuations in Europe
< How many have been bought versus built? Teracom Boxer Group, Teracom Denmark, Towercom, < Growing and scaling a towerco
< What capex on new build or tower strengthening is Vertical, Victus Networks, Wireless Infrastructure Group < Identifying new investment opportunities in European
planned? towercos
< What is the current opex per tower? What will I learn from the co-located roundtables? < Tower transaction deal structures and terms
< Who are the major tenants? < Towerco – Public equity, private equity or
< What is the tenancy ratio? The Investors Club has been designed to complement
infrastructure opportunity?
< Are the revenues from tenancies in local currency or our TowerXchange Meetup roundtables and published
euro / dollars? research which provide the critical baseline data and Plus attend one of our operational roundtables to better
< What is the current shareholding of the company? insight into the dynamics of key markets on which to base understand key dynamics and performance metrics in the
< How much investment is the company looking for? investment decisions. telecom tower industry and ensure that your investment
< What is their proposed exit strategy? is performing optimally.
14 country or region specific roundtables will address
< Who is the management team and what experience do
such issues as:
they have? Are you a towerco interested in participating
< How many towers are there in the market?
How can I get involved? < What ratio of towers are owned by towercos versus in the Investors’ Club?
MNOs?
In order to participate in the first Investors Club you < What are current and potential tenancy ratios?
Registering your attendance at the TowerXchange
must be registered for the TowerXchange Meetup < How many independent towercos are there in the
Europe. As a delegate you will be issued with a list of market? Meetup Europe enables investors to request
attending towercos and with whom our team will help < Are new market entrants expected? meetings with you. If you would like to pre-arrange
you secure a number of meetings in our lounge area. If < What network sharing agreements exist between a number of meetings with multiple investors,
you would like to secure a large number of meetings, we MNOs? we advise that you pre-book one of the onsite
advise that you book exclusive use of one of the on-site < What MNO consolidation is on the horizon?
< What is the extent of LTE roll-out and how much meeting rooms - please contact Annabelle Mayhew
private meeting rooms. These are allocated on a strictly
first come, first served basis - please contact Annabelle growth potential is there? amayhew@towerxchange.com to enquire about
Mayhew amayhew@towerxchange.com to enquire < What is the rate of growth of data usage? availability
about availability. < What currency risk is there?

Tower Industry Value Chain
Who you will meet
Investors: private equity, DFIs, debt finance, infrastructure funds
TowerXchange Meetups bring together 200+
business leaders representing the entire telecoms
Investment management advisors Law firms and broadcast infrastructure ecosystem.
TowerXchange engages with MNOs who retain
Strategic consultancy Group level strategists
Independent Towercos Due diligence C-suite & network planners at local OpCos
their passive infrastructure, and with 151
Sell co-locations Demand modeling independent towercos and network sharing joint
Generate amendment revenue Asset register audits
Build-to-suit
Mobile Network Operators ventures which between them have acquired or
Transfer assets to built over 2,032,800 towers worldwide.
Achieve SLAs
Efficiency programmes
Optimise supplier contracts Outsource TowerXchange also maintains relationships with
to
over 500 investment and advisory firms who
Subcontract
Tier 1 OEMs Outsource facilitate tower transactions.
to
Subcontract
or in-house
TowerXchange explores the implications of
Managed service providers
tower transactions for the supply chain: from
tower designers and manufacturers to tower
Construction services Static assets Monitoring & 0&M services
construction and O&M firms. The TowerXchange
Turnkey infrastructure rollout Towers & masts management Maintenance
Tower design & manufacture Shelters RMS Staffing community engages with every major telecom
Import, customs & delivery Brackets Intelligence/analysis Spare parts energy equipment and service provider worldwide,
Site acq, leasing & permitting Enclosures Site management Security including an emerging class of credible ESCOs.
Installation of towers Lighting Job ticketing Refueling We track over 30 different RMS and ILM solution
Tower strengthening Fencing Asset lifecycle platform
providers, as well as leaders in access control and
Decommissioning Energy as a service
Access control H&S solutions for cell sites. And we connect the
Dynamic assets passive infrastructure ecosystem with innovations
in microcells, small cells and DAS as well as fibre,
Energy equipment Batteries Air conditioning ESCOs microwave and satellite backhaul.
Diesel genset Rectifiers Lightning protection Opex models
Solar Inverters Controller Vendor finance The TowerXchange community is brought
Wind Line conditioning Voltage regulator Distributed generation together by the renowned TowerXchange
Fuel cell PIUs Alternator Community power Journal, circulated to 15,000 tower industry
leaders worldwide. The tower industry’s leaders
gather annually at TowerXchange Meetups – we
Fibre, microwave, satellite backhaul Microcells, small cells & DAS Active equipment look forward to meeting you there!

What is a Meetup?
Proven over five past events attended by over 1,000 decision makers, TowerXchange Meetups are
unique executive retreats for the most influential men and women in telecoms infrastructure.
Held annually in Africa, Asia, CALA and Europe, we use small group round table breakouts to give
participants unique access to the key stakeholders in the telecom tower industry in each country. Every TowerXchange expo has sold out
Laser beam focus on towers
Another problem with other telecom events is that

passive infrastructure is typically hidden away as an
under-appreciated small part of a broader show. The
huge audience of middle management, device and
VAS influencers at other events dilutes access to the
few tower decision makers present. In comparison,
TowerXchange has been described as a “networking
club for tower geeks” – everyone you meet at
TowerXchange is focused on towers, and everyone you
meet is a decision maker.
Curated expo of proven suppliers
80-90% of the leading towercos and MNOs attend Accelerate vendor selection
At other telecom events, a maximum of around 10-15% of the CXOs who lead tower strategy for MNOs and If you want to buy telecom tower structures and
towercos are in attendance. At TowerXchange we regularly attract multiple senior representatives from 80- accessories, energy equipment, energy services, RMS,
90% of the towercos active in any region, as well as the majority of MNOs. And thanks to our unique structured ILM, access control, H&S equipment, or if you want to
networking round tables, everyone has access to these decision makers. contract with tower construction and O&M firms, then

priorities of efficiency programmes? Are opex-sharing
models being explored? Are microcells, small cells and
DAS being rolled out?
Unique structured networking
TowerXchange’s renowned round table breakouts are

led by an expert moderator, but everyone’s opinions
and questions are welcomed. Each round table focuses
on a specific country, financial or operational issue.
You can attend three or four round tables at each
Meetup. Register now to secure your choice of round
table and tailor your agenda to meet your networking
objectives!
Unique round table breakouts
the private expo at the TowerXchange Meetup provides consolidations, extensions and densification, and
a ‘who’s who’ of proven passive infrastructure examine ownership of energy assets and the prospects
equipment and service providers. for energy service providers.
Identify opportunities for your business today… …And opportunities for your business tomorrow
TowerXchange introduces each Meetup with our We use MNO and towerco CXO panel sessions to
proprietary research, defining the size of the understand the future of the tower industry. What
tower market in each country, identifying who has been the progress of tower transactions and of
owns the towers today and predicting the future portfolio integration? What future acquisitions are
Suresh Sidhu’s insightful keynote address
tower transaction pipeline. We also track network planned? How is capex being deployed? What are the

With special thanks to the TowerXchange “Inner Circle”
Our informal network of advisers: About TowerXchange
TowerXchange is your independent

(Chairman) Daniel Lee Chuck Green Kurt Bagwell
Managing Director Executive Chairman President International community for operators, towercos, investors
Intrepid Advisory Partners Helios Towers Africa SBA Communications
and suppliers interested in EMEA, CALA
Akhil Gupta Suresh Sidhu Jim Eisenstein and Asian towers. We’re a community
Chairman CEO Chairman & CEO
Bharti Infratel edotco Grupo TorreSur of practitioners formed to promote
and accelerate infrastructure sharing.
Michel Faivre Hal Hess Riana Donaldson
Directeur Programme Partage EVP, International Operations and Manager: International Network TowerXchange don’t build, operate or invest
d’Infrastructure AMEA President, EMEA and Latin America Operations Support in towers; we’re a neutral community host
Orange American Tower Vodacom
and commentator on telecoms infrastructure.
Terry Rhodes Nobel Tanihaha Bimal Dayal
Acting CEO President Director COO
Eaton Towers PT SOLUSI TUNAS PRATAMA (STP) Indus Towers The TowerXchange Journal is free to
qualifying recipients. We also provide
Marc Ganzi Umang Das Inder Bajaj
President, Digital Bridge & Chief Mentor CEO webinars and regular meetups.
Mexico Tower Partners Viom Networks HTN Towers TowerXchange monetizes this community
Arun Kapur Maria Scotti Tunde Titilayo through hosting annual Meetups and the
Executive Chairman CEO Vice Chairman sale of advertising, without compromising
Irrawaddy Green Towers Torrecom SWAP International
editorial integrity.
James Maclaurin David Meganck Thorsten Schaefer
formerly CEO Founder and COO CEO
edotco Acsys azeti Networks TowerXchange was founded by Kieron
Osmotherly, a TMT community host and
Areef Kassam Gary Staunton Jeffrey Eldredge
Director of Infrastructure CEO Partner events organizer with 16 years’ experience,
GSMA Mobile for Development Likusasa Group Vinson & Elkins and is governed with the support and advice
Ayman Al Adl Tilak Raj Dua Enda Hardiman of the TowerXchange “Inner Circle” – an
Director - TMT Director General Managing Partner informal network of advisors
Standard Chartered Bank TAIPA Hardiman Telecommunications Ltd.
Dagan Kasavana Nina Triantis Adeel Bajwa © 2015 Site Seven Media Ltd. All rights reserved. Neither the
CEO Managing Director, Global, Head of Senior GM of Legal Affairs and whole nor any substantial part of this publication may be re-
Phoenix Tower International Telecoms & Media Contracts produced, stored in a retrieval system, or transmitted by any
Standard Bank Warid Telecom
means without the prior permission of Site Seven Media Ltd.
Malcolm Collins
Short extracts may be quoted if TowerXchange is cited as the
Chief Executive Peter Owen Edmunds Scott Coates
CTIL Co-founder and Chairman CEO source. TowerXchange is a trading name of Site Seven Media
Russian Towers Wireless Infrastructure Group Ltd, registered in the UK. Company number 8293930.

TowerXchange’s analysis of the The most recent European news come from
Spanish giant, Telefónica. After months of
speculation surrounding a potential divestment of
independent tower market in Europe towers, January saw the carve out of their 11,500
Spanish sites into a newly formed infrastructure
business – Wireless Towers. Whilst still unclear
Top ten independent towercos in Europe by telecom site count (excludes infracos) whether this will lead to an IPO or sale (although
a two stage approach involving both seems likely)
35,000 Source: TowerXchange
– the move will either result in the introduction
of significant sized operator-owned competitor,
30,000
or will provide a highly attractive acquisition for
either a European or an international towerco
25,000
to achieve scale rapidly. Speculation is already
mounting that Telefónica’s Wireless Towers
20,000
footprint could be extended to absorb their
German and remaining CALA towers, although the
15,000
27,000 MNO has not confirmed this.
10,000 In Russia, the sale of Vimpelcom’s 10,400 towers

15,127 is well underway, with three shortlisted bidders
11,519 11,500 10,550
5,000 – Russian Towers, Vertical and the Russian Direct
7,870 6,966
5,300 Investment Fund in the running for the portfolio.
2,618 2,300 2,300
0 The deal is expected to close in Q1-2 2016, marking
rm e
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er I
G ctu ess
ex
w PS
W ai
w al
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tu sch
Russia’s first major tower transaction. Following

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the completion of the sale it is widely expected

as W
Fu De
To
that Vimpelcom will then turn their attention to
fr
In
potential divestitures across their CIS markets, in a

The past couple of months have seen big news in 35% in 2016 with the figure having the potential bid to further reduce their current debt.
the European market indicating a major shift is to exceed 40% in the next two years if momentum
underway in attitudes toward tower ownership. continues apace. If such forecasts came to Keeping our focus on the east, Russia’s MTS and
Of Europe’s 600,000 towers (including Russia pass, towercos would have the same level of Megafon are also rumoured to be re-evaluating
and the CIS), currently 29% sit in the hands of penetration in Europe as they currently do in their tower strategies – with Megafon looking into
independent towercos, operator-captive towercos Sub-Saharan Africa, where four towercos rapidly a potential carve out with a view to IPO. In Turkey
and JV infracos but with the recent pipeline of rolled up the most investible assets ostensibly it has recently been reported that Turkcell have
activity, TowerXchange expect this to increase to over a five year period. re-opened discussions with bankers regarding a

potential tower sale, and in Poland, Orange are Estimated tower and rooftop counts for selected markets in Europe
also rumoured to be looking into a tower sale.
The other major piece of news is the imminent

closure of the sale of a 45% stake in Telecom Italia’s
infrastructure unit – Inwit. Following a successful
IPO of 40% of the business in 2015, the sale of the
45% stake is expected to close mid-March. Three
offers have been received – from American Tower
(AMT), EI Towers and Cellnex in conjunction with
infrastructure fund F2i (the latter consortium Ireland Czech Nether- France Spain Italy UK Germany Russia
reportedly being the front runner). EI Towers 4,000 Republic lands: 45,000 45,052 47,517 53,000 63,754 85,000
favors acquiring a smaller stake – it remains to be 12,336 15,204
seen whether the AMT or Cellnex bid would trigger
the acquisition of the whole company.
TowerXchange are currently tracking 67 towercos,

broadcast companies and JV infracos with tower
portfolios in Europe. With the exception of Cellnex
(active in Spain and Italy), Wireless Infrastructure
Group (with assets in the UK, Ireland and the
Netherlands), Shere Group (with towers in the
Source: TowerXchange
UK and Netherlands) and Britannia/Hibernian
(with assets in both the UK and Ireland), all other market, with independent tower ownership in with an appetite for smaller portfolios, from BTS
companies have a presence in just one country. the hands of a number of mid-sized companies startups to 100-2,000 towers. But the question
and with investors having a growing appetite to remains: does anyone have the appetite and
Major tower transactions on the cards represent invest in European tower infrastructure, it often digestive capacity to compete with Cellnex for
an opportunity for Europe’s towercos to expand seems that there is more capital seeking tower Europe’s largest sale and leasebacks?
into new geographies and also represent an opportunities than there are opportunities. A
opportunity for major international players to gain domestic player with local expertise together Moving away from macro-structures, an
a footprint in Europe: #3 and #4 US towercos SBA with the backing of a financial investor and the increasing number of European towercos are
Communications and Digital Bridge both have an presence of a strong management team could be tapping opportunities in the small cell and DAS
appetite for European towers, for example. What’s well placed to make a significant play in upcoming markets. With European MNOs accustomed to
more, such transactions are leading to the creation transactions. TowerXchange are tracking a lot infrastructure sharing, and urban infill to meet
of new domestic towercos. In such a fragmented of towercos, infrastructure funds and PE firms growing data demand sitting as a top priority,

European tower deals since 2008
Cost per
Year Country Seller Buyer Tower count Deal value € Deal structure
tower €
2015 Ireland Coillte Cignal 113 Portfolio acquisition
2015 Germany Telefonica Deutsche Telecom/ Omega Towers 7700 Asset Transfer
2015 Italy Tecnorad EI Towers 134 17,000,000 126,866 Portfolio acquisition
2015 Italy Wind (Vimpelcom) Cellnex 7377 693,000,000 93,941 SLB with 10% equity
2015 Italy TowerCo Cellnex 212 94,600,000 446,226 Company acquisition
2014 Spain Telefonica/Yoigo Cellnex 4277 385,000,000 90,016 SLB
2012 France Bougyes Telecom FPS Towers 2166 185,000,000 100,400 SLB with 15% equity
2012 Germany KPN American Tower 2031 393,000,000 193,501 SLB
2012 Netherlands KPN Protelindo 261 75,000,000 287,356 SLB
2012 Netherlands KPN Shere Group 460 115,000,000 250,000 SLB
2012 Spain Telefonica Cellnex 500 45,000,000 90,000 SLB
2010 Netherlands KPN Open Tower Company 500 SLB
2008 Netherlands KPN Open Tower Company 101 SLB
Totals / average 25,832 2,002,600,000 114,973 Source: TowerXchange
there exists significant potential for a third party interviews on this topic in our small cells special
infrastructure provider to deliver more cost feature later in this edition. At such a pivotal time for the European tower
effective, neutral host heterogeneous networks. industry, TowerXchange is excited to be
The uptake of venue-DAS is growing significantly Further focus for Europe’s towercos resides launching the first TowerXchange Meetup
and a number of city-wide outdoor small cell in decommissioning as the impact of MNO Europe in London, taking place on 12-13 April.
projects are being rolled out, with observers consolidation (such as that of 3’s acquisition of For further detail on the European tower
believing that 2016/2017 will be the time when O2 in Ireland and the proposed merger of 3 and market, checkout TowerXchange’s Who’s Who in
small cells and DAS start to achieve scale. Cellnex O2 in the UK) starts to filter through to their European towers.
and Wireless Infrastructure Group offer exclusive infrastructure

European tower activity - the headlines
Azerbaijan: Infraco Azerconnect active in the Hungary: Antenna Hungaria acquired by the Romania: Orange and Vodafone sharing
country. state from TDF in 2014. networks since 2013.
CIS: Logycom forms first independent towerco in Ireland: Towercom, ESB Telecoms, WIG, Russia: 10,400 Vimpelcom towers up for sale
Kazakhstan, with an order to build just under 100 Hibernian, Cellcom and Highpoint active. and rumoured divestments from MTS and
towers. Meanwhile, Vimpelcom’s towers could come to Together with three state-owned entities, they Megafon. Active towercos include Russian
market across several CIS states. own 40% of Ireland’s 4,000 towers. 3’s acquisition Towers, Vertical, Link Development and Service
of O2 disrupted network sharing agreements and Telecom.
Czech Republic: CETIN, infrastructure business is leading to consolidation. Coillte sold 298 sites
carved out of O2 has 5,300 towers and 750 micro sites. including 113 towers to InfraVia Capital Partners Serbia: Managed service provider Konsing
Also in infrasharing venture with T-Mobile. creating new towerco Cignal. Group owns a portfolio of 47 sites.
Denmark: Infrasharing mandated by the state - Italy: 45% stake in Inwit being sold following an Spain: Telefonica carved out 11,500 towers into
TT-Network formed by Telia and Telenor. MNO IPO of 40% of the business. Cellnex/F2i, American new infrastructure business, Wireless Towers,
divestments expected in 2-4 years. Tower and EI Towers in the running. EI Towers with a view to sell or IPO. Towerco Cellnex active
acquisition of fellow broadcast towerco Rai Way after acquiring towers from Telefonica/Yoigo.
Finland: Digita sold to First State Investments in 2012. initially halted. EI Towers continue to roll-up Axion towers rumoured to be on the market.
smaller towercos. Cellnex closed landmark sale
France: Towerco FPS active after acquiring towers and leaseback with Wind in 2015. Sweden: Several infracos including
from Bougyes Telecom and 20,000 rooftop sites from Net4Mobility, 3GiS and SUNAB
Loxel. TDF lead the market, ITAS TIM and Towercast Latvia: Bite Group brought towers to market in
also active. Free Mobile’s entry disrupting the market, 2013 but no agreement reached. Turkey: Turkcell’s Global Tower manages over
SFR-Numericable forced into merger; Bouygues 16,000 sites including 7,870 macro towers.
Telecom looking to exit? Could more towers become Netherlands: Protelindo, Shere Group and Open Turkcell in talks with bankers regarding a
available for sale and leaseback? Tower Company acquired a total of 1,322 towers potential tower sale.
from KPN. Rumours that T-Mobile may be looking
Germany: Towercos Deutsche Funkturm and to sell its business. UK: Towercos active in the market include
American Tower active in the market, ATC’s towers Arqiva, WIG and Shere Group, MBNL and CTIL
bought from KPN. Potential for carve out and sale/IPO Poland: Emitel (towerco) and NetWorkS! (infraco) sizable infracos. Sale of O2 to Hutchison still
of Telefonica’s 10-12,000 towers. active in the market. Rumours surrounding a under review; implications for joint venture
potential tower sale by Orange. infracos unclear.
Greece: Infraco VICTUS Networks run by Vodafone
Greece and Wind Hellas. Initial rumors of potential Portugal: Portugal Telecom sold to Altice – tower Ukraine: Towerco UKRTower active in the
sale and leasebacks emerging. sale rumour has gone quiet. market.

European heatmap
Legend
TowerXchange research has not revealed any infracos or

towercos to date
Towercos or infracos active in the market. No recent
transactions have taken place and none rumoured to take
place soon
Towercos or infracos active in the market. No current
transactions taking place but an attempted tower sale has
taken place in the last 3 years or there are unconfirmed
rumours of a deal in this market.
Towercos or infracos active in the market. Rumours of deals
confirmed in the market.
Towercos or infracos active in the market. Deals of significant
size have taken place in the last 5 years.
Towercos or infracos active in the market. Deals have taken
place in the last year and more imminent deals rumoured
Note: For the purposes of our European coverage, ‘Towerco’ describes an independent company which owns and operates passive infrastructure for commercial profit. ‘Infraco’ incorporates MNO joint venture
organisations and carve outs which serve more than one entity or market their towers commercially

Who owns Europe’s
A breakdown of the European telecom tower
industry by tower ownership
telecom towers? TowerXchange have been studying the emerging

European tower industry for almost a year now,
Smart capital seeks investible European tower builders – and tower consolidators and so far we have identified 41 telecom and
broadcast towercos in Europe, including ten joint
TowerXchange have spoken to dozens of private equity, institutional and strategic venture infracos, three operator-led towercos
investors keen to put capital to work within the emerging European telecom tower and 28 independent towercos. In total these 41
market. So what are your investment options in Europe? Investors in listed entities companies own or operate 166,494 towers; 29% of
Cellnex and Inwit have to date enjoyed buoyant valuations – but that opens only Europe’s ~600,000 towers. The remaining 433,500+
passive investments restricted to date to Southern Europe. TowerXchange have assets remain operator-captive. We breakdown the
identified 28 independent towercos in Europe, and many are highly investible, ownership of Europe’s towers in figure one.
but most are well capitalised and few are seeking new equity partners. How
about Europe’s ten joint venture infrastructure sharing companies? Not easy: From this simple analysis, you can see that the
few if any currently solicit third party investment. The starting point for many PE European tower market is far from fully penetrated.
firms’ investment in towers are build to suit towercos who permit, build, own and Why?
By Kieron Osmotherly, operate towers in response to MNO search rings – but TowerXchange have found
CEO, TowerXchange
few such firms in Europe. A gap in the market perhaps… Two of the three primary motivations for tower
divestitures in other markets are less prevalent in
Keywords: 3GIS, Alticom, American Tower, Antenna Hungaria, Arqiva, Axion, Azerconnect, Bankability, Build- Europe: many of Europe’s MNOs don’t have the
to-Suit, CTIL, Cellnex, Colite, Decommissioning, Deutsche Funkturm, Digita, EI Networks, ESB Telecos, Emitel, same need to raise capital as MNOs do in emerging
Estonia, Europe, FPS Towers, Falck, Global Tower, HIGHPOINT (obelisk), Hi3G, Hibernian/Britannia Towers, ITAS markets, nor are they motivated to outsource the
TIM, Infrastructure Sharing, Inwit, JV Infraco, Link Development, MBNL, Market Overview, Mosaic, NetWorkS!, expansion of their tower networks to specialist
Open Tower Company, Operator-Led JV, Protelindo, Research, Russian Towers, Sale & Leaseback, Sheere Group, third parties during periods of intense growth.
Sunab, TDF, TT-Network, TowerXchange Research, Towercast, Towercom, Towercos, VICTUS Networks, Who’s Who,
However, the third motivation, the stabilisation of
Wireless Infrastructure Group, České Radiokomunikace
opex by outsourcing or divesting non-core assets
and activities remains a motivation. Meanwhile
the European tower market introduces a new
Read this article to learn:
motivation; the consolidation and decommissioning
< How many towers are there in Europe and who owns them? of overlapping tower networks; creating value
< Contrasting infrasharing JVs, operator-led and independent towercos by reducing operating costs (primarily land lease
< The drivers for European MNOs to divest towers costs) and creating value by adding more tenants
< The need for more European tower builders (and tower consolidators) to remaining towers. This new decommissioning
function means business models and balance

Figure one: A breakdown of the Figure two: Who’s who in European JV infracos and operator-led towercos
ownership of Europe’s ~600,000 Countries Est site count* Business model
telecom cell sites
Deutsche Funkturm Germany 27,000 Operator-led towerco
CTIL UK 18,000 JV Infraco
10% UK
MBNL 18,000 JV Infraco
9% Wireless Towers (Telxius) Spain 11,500 Operator-led towerco
NetworkS! Poland 10,000 JV Infraco
10% Global Towers Turkey 7,870 Operator-led towerco
TT Network Denmark 2,500 JV Infraco
UKR Tower Ukraine 370 Operator-led towerco
71% Hi3G Sweden 125 JV Infraco
3GIS Swede Undisclosed JV Infraco
Azerconnect Azerbaijan Undisclosed JV Infraco
Mosaic Ireland Undisclosed JV Infraco
Net4Mobility Sweden Undisclosed JV Infraco
MNO captive (433,506)
Ovidiu Romania Undisclosed JV Infraco
JV infracos (58,500) Sunab Sweden Undisclosed JV Infraco
Operator-led towercos (46,389) VICTUS Greece Undisclosed JV Infraco
Independent towercos (61,605) *We understand Deutsche Funkturm has around 8,500 GBTs, with the rest rooftops
Defining ‘towercos’ and ‘infracos’ Europe also has a number of joint venture infracos, were consolidated into joint venture newcos. Note
typically carved out of two or more MNOs, whose that there have been several other infrastructure
We define a towerco as a business whose raison raison d’etre is to manage, supplement and consolidate sharing deals in Europe where the assets apparently
d’etre is to construct, consolidate AND co-locate those assets, but who don’t market the sites for co- remained under the ownership and management of
telecom towers – with or without a hybrid business location as proactively as an independent towerco. the MNOs concerned:
model also including broadcast towers, IoT, Typically the tower assets remain on the partner
heterogeneous and public safety network hosting. MNOs’ balance sheets, but there are instances of this < Austria (T-Mobile+ Hutchison 3G)
Note that there is a sub-category within this segment: business model where the passive infrastructure has < Belgium (Orange+KPN)
independent towercos that are majority owned been transferred to the infraco (e.g. CTIL in the UK). < Czech Republic (Telefonica+T-Mobile)
by parties other than MNOs, and operator captive < Finland (TeliaSonera+DNA)
towercos where most or all of the equity is retained A simple who’s who of European towercos is presented < France (SFR+Bouygues)
by an MNO. There are three operator captive in figures two and three < Iceland (Vodafone+Nova)
towercos in Europe: Deutsche Funkturm, Global < The Netherlands (Tele2+T-Mobile)
Tower in Turkey and the Ukraine, and Inwit (which TowerXchange include in our analysis of “JV < Romania (Orange+Vodafone)
remains 60% owned by Telecom Italia). infracos” only infrastructure sharing deals which < Russia (Vimpelcom+MTS)

Figure three: Who’s who in European independent towercos sheets in the European tower market will differ
substantially from the ‘old growth’ tower industry in
Countries Est site count* Business model
Germany Operator-led towerco
markets like the U.S. and India.
Deutsche Funkturm 27,000
Cellnex Spain, Italy 15,377 Independent towerco
Inwit Italy 11,519 Independent towerco
UK 10,500 Broadcast towerco
Time for European MNOs to cash out
Arqiva
TDF France 6,966 Broadcast towerco
CETIN Czech Republic 5,300 Independent towerco
EI Towers Italy 2,300 Broadcast towerco Another new motivation for European MNOs to
Rai Way Italy 2,300 Broadcast towerco divest towers is the relative favorable relative
FPS Tower France 2,051 Independent towerco
American Tower Germany Germany 2,031 Independent towerco multiple arbitrage between MNO and towerco
Wireless Infrastructure Group UK, Ireland, Netherlands 2,000 Independent towerco valuations. This has never been more pronounced
Russian Towers Russia 1,700 Independent towerco
Vertical Russia 1,600 Independent towerco than when called to attention by the valuations
Shere Group Uk, Netherlands 960 Independent towerco secured by the recent successful IPOs of Cellnex and
Ceske Radiokomunikace Czech Republic 800 Broadcast towerco
Open Tower Company Netherlands 684 Independent towerco Inwit. Whether MNO’s towers sit on their balance
Axion Spain 580 Broadcast towerco sheet, on the balance sheet of a captive towerco or
ITAS TIM France 420 Independent towerco
Towercom Ireland 400 Independent towerco a joint venture infraco, the potential valuation of
ESB Telecoms Ireland 377 Independent towerco European towers at IPO, or indeed to a strategic
Emitel Poland 377 Broadcast towerco
Link Development Russia 300 Independent towerco buyer, may be at an all time high. Is it time for
Protelindo Netherlands 260 Independent towerco European MNOs to cash in their chips whilst they’re
2rn Ireland 150 Broadcast towerco
Cignal Ireland 113 Independent towerco ahead in the game of passive infrastructure? Indeed,
Logycom Kazakhstan 100 Independent towerco
is this a game European MNOs want to be playing
Britannia / Hibernian UK, Ireland 70 Independent towerco
Highpoint (Obelisk) Ireland 50 Independent towerco any more when they could take their metaphorical
Konsing Group Serbia 47 Independent towerco
Austria 40 Broadcast towerco
winnings to the spectrum auction or customer
Österreichischer Rundfunk
Cellcom Ireland 40 Independent towerco experience improvement tables?
Alticom Netherlands 33 Broadcast towerco
Service Telecom Russia 1 Independent towerco
EuroTower - 0 Independent towerco At TowerXchange, we tend to think that four tower
Antenna Hungaria Hungaria Undisclosed Broadcast towerco
Digea Greece Undisclosed Broadcast towerco transactions of scale (2,000+ towers) being sold
Digita Finland Undisclosed Broadcast towerco and leased back is indicative that a tower market
ETB Serbia Undisclosed Broadcast towerco
Levira Estonia Undisclosed Broadcast towerco has achieved ‘launch velocity’. That benchmark
Media Broadcast Germany Undisclosed Broadcast towerco was achieved with Cellnex’s acquisition of 7,377
Norkring Norway Undisclosed Broadcast towerco
Norkring Belgie Belgium Undisclosed Broadcast towerco towers from Wind Italy, following Cellnex’s previous
OIV Croatia Undisclosed Broadcast towerco acquisitions from Telefónica and Yoigo in Spain
Radiocom Romania Undisclosed Broadcast towerco
RTP Portugal Undisclosed Broadcast towerco in 2014, FPS’s acquisition of 2,166 towers from
Shared Access UK Undisclosed Independent towerco Bougyes Telecom in France and American Tower’s
Swisscom Switzerland Undisclosed Broadcast towerco
Teracom Boxer Group Sweden, Denmark Undisclosed Broadcast towerco acquisition of a portfolio of 2,031 towers in Germany
Towercast France Undisclosed Broadcast towerco – the latter two deals being announced in 2012.

Five critical considerations to maximise towerco valuations on exit – by With a further 1,822 towers acquired in five smaller
sale and leasebacks in the Netherlands (KPN to
Nicholas Van Slyck, a skilled entrepreneur whose Costa Rican towerco was
Protelindo, Shere Group and Open Tower Company)
sold to SBA Communications in 2010. Nicholas is now GM – Costa Rica at SBA and Spain (the first phase of Telefónica to Cellnex),
the blue touch-paper has been lit for tower sale and
leasebacks in Europe.
The inauguration of Cellnex, already highly

acquisitive when fully owned by Abertis, has
created another prospective counterpart for tower
divestitures in a market that had previously been
stymied by U.S. towercos’ reluctance to close the
Paper Assets Permits Rates Growth gap to European MNOs’ valuation of their towers.
Equipped with an acquisition warchest from a
successful IPO, Cellnex’s investors have bought
PAPER - Get the paperwork done right: it’s your portfolio and, especially in a place like Costa into a consolidation narrative that will extend the
really important to have strong ground leases Rica where sometimes as many as eight or nine towerco’s acquisition spree. So while U.S. strategic
and good tenant agreements in place, especially if permits are needed, you’d better get things right investors may have preferred to deploy their capital
you plan on eventually selling the business. from day one. elsewhere whilst Europe stood still, the pipeline
of tower transactions is flowing now – whether
ASSETS - Don’t cut corners on the construction: RATES - Negotiate the right rental rates with American Tower, SBA Communications or even
I have seen quite a few entrepreneurs opting tenants: I have seen some small towercos Crown Castle is interested to tap the European
for cheap solutions when it came to building agreeing very low lease rates in an effort to gain tower transaction pipeline remains to be seen.
sites. But in the long run, this strategy won’t pay business but again, this strategy won’t pay off and
off. Building robust, multi-carrier towers with will affect the payout on exit. Aim for good, fair Tower builders and tower consolidators needed
plenty of capacity will position your business on market rates with all your tenants.
the right track to be acquired at a fair price. If a The European tower market, like any tower market,
buyer has to reinforce your towers, this will have GROWTH - Lease up: a good tower professional is not just about large scale sale and leasebacks.
a negative impact on your ROI. needs to keep an eye towards acquiring a second,
a third and even a fourth tenant if possible. That’s There are some great tower builders in Europe.
PERMITS - Ensure your permits are in place: where the real value is. If your plan is to build Some are pure builders, some blend small to
some towercos start building sites without the single tenant towers in rural areas with limited medium sized acquisitions into the business model.
necessary permits in an attempt to speed up the lease up potential, you might want to re-think There are some very solid, investible platforms in
process. But permits create immense value for your business model Europe – in fact, most are very happy with their
capital structure, thank you very much, and looking

“
for more assets of a similar ilk to buy. Indeed,
TowerXchange has spoken to dozens of private
equity firms, infrastructure funds and strategic
investors with an appetite to invest in or acquire
small to medium sized European towercos. There
is more capital with appetite for European tower
Whether the portfolio is assembled purely by building to suit,
builders (and tower consolidators) than there are
investable platforms.
Consider this; there are maybe 10-12 bona fide build

to suit (BTS) towercos serving a European tower
or as a product of a decent scale decommissioning opportunity
where the towerco retains the consolidated towers, European
towers are becoming a safer bet
“
market of ~600,000 towers. There are a similar
number serving a Brazilian tower market which is
one twelfth that size. Wireless Estimator tracks 100
U.S. BTS towercos serving a market a quarter of the
size of Europe. and small cells as infill and capacity as subscribers portfolio is assembled purely by building to suit,
demand more and more data, and sooner or later or as a product of a decent scale decommissioning
Why so few towercos in Europe? One explanation migrate to 4G. opportunity where the towerco retains the
I’ve heard is that Europe’s tower market is saturated consolidated towers, European towers are becoming
– it’s a consolidation game not a growth game. Well, There is no shortage of tower building and tower a safer bet.
it isn’t saturated and it isn’t just a consolidation decommissioning wisdom in Europe – some of the
game. In general, Europe’s tower networks are world’s most renowned turnkey infrastructure European MNOs: it’s time to cash in your tower
more mature than some other continents; for firms come out of Europe. But there hasn’t been chips.
example there are an average of 1,673 SIMs per the same appetite to move up the value chain
tower in Europe compared to 2,597 in MENA, 4,670 from building towers for MNOs to building towers, European tower builders: it’s time to put your chips
in CALA and 4,717 in SSA. However, Europe has retaining those assets and leasing them to MNOs. on the table, the towerco business is now be a safe
considerably less tenants per tower than the U.S. One reason for this lack of appetite is a lack of bet in Europe
and Indian markets where tenancy ratios are close realised towerco exits; all I can say in response
to two, and where there are 2,352 and 2,091 SIMs to that is that any towerco will be not be short We will be hosting our inaugural
per tower respectively, albeit obviously around half of prospective counterparts to realise their exit TowerXchange Meetup Europe on 12-13 April
that number per BTS. There is some consolidation strategy provided they build a portfolio of several 2016 in London. If you are a stakeholder
to be undertaken in Europe – decommissioning in European towers, or if you’d like to be a
hundred to a few thousand robust tower assets
stakeholder in European towers, and have an
represents a great opportunity for tower in unique locations, with structural capacity for
interest in joining our speaker panel, then
entrepreneurs in itself – but in every market there multiple tenants, and demonstrate the market email me at kosmotherly@towerxchange.com.
is a need for new towers, rooftops, microcells, DAS potential to lease up those towers. Whether the

TowerXchange’s who’s who
2rn: Irish broadcast towerco with around 150
towers, some of which are used by telecom clients.
in European towers 3GIS: Operates a shared network between Telenor

and 3 (Hi3G) in Sweden.
TowerXchange presents an A-Z of 122 MNOs, towercos, investors and advisors who
could be key stakeholders in the emerging European tower industry Abertis Telecom: See Cellnex.
The European telecom tower market may be opening up to the independent towerco business model. Held Alinda Capital Partners: Acquired 100% equity
in stasis for many years whilst Europe’s MNOs didn’t need cash and towercos weren’t prepared to meet in Polish broadcast towerco Emitel in 2013. Emitel
their valuations, successful new towerco ventures like Cellnex, Inwit and CETIN are galvanising the tower has diversified into telecom co-location. Alinda are
transaction pipeline and rekindling interest in Europe’s existing telecom and broadcast towercos. believed to have appetite for more investments in
the tower industry.
Keywords: TowerXchange Research, Who’s Who, MNOs, Towercos, Investors, Europe, 2rn, 3GIS, Abertis
Telecom, Alinda Capital Partners, Altice, Alticom, America Movil, American Tower, Analysys Mason, Antenna Altice: French billionaire Patrick Drahl’s Altice
Hungaria, Antin, Arcus, Arqiva, Ashmore, Axion Azerconnect, Berkshire Partners, Blackstone, Bouygues Telecom,
acquired French #2 MNO Numericable-SFR from
Britannia Towers, Brookfield, BuyIn, Capital Group, CEE Equity Partners, Cellnex, České Radiokomunikace, Česká
Telekomunikační Infrastruktura, CETIN, Cignal, Citi, Communication Infrastructure Partners, Crown Castle, CTIL, Vivendi in 2014 and has been trying to merge this
Deutsche Funkturm, Digea, Digita, Digital Bridge, ECS, EE, EI Towers, Emitel, ESB Telecoms, ESN Group, ETB, entity with third ranked MNO Bouygues Telecom, a
European Wireless Infrastructure Association, EWIA, EuroTower, EY, F2i, FMO, FPS Towers, Galata, Global Tower,
transaction which may shake loose more of one or
Goldman Sachs, Hardiman Telecommunications, Hibernian Towers, Highpoint, Hutchison, InfraVia, ING, IFC,
Intrepid Advisory Partners, Inwit, ITAS TIM, J.P. Morgan, KPN, KPR Consult, Levira, Link Development, Logycom both entity’s towers. Altice also acquired Portugal
Group, Macquarie, MBNL, Media Broadcast, MegaFon, MOSAIC, Mott MacDonald, MTS, Net4Mobility, NetShare, Telecom in June 2015, and has been similarly
NetWorkS!, Norkring, Obelisk, OIV, Open Tower Company, Orange, ORS, Portugal Telecom, PPF, Protelindo,
acquisitive in the Americas. Altice is relatively
Providence Equity, Quippo, Radicom, Rai Way, Rothschild, RTRS, Russian Towers, SBA Communications, Service
Telecom, Shere Group, SUNAB, Swisscom, T-Mobile, TAP Advisors, TDF, Tele2, Tele2 Russia, Telefónica, Telemont, highly leveraged and has advocated efficiencies that
Telenor, Telekom Austria, TeliaSonera, Teracom, Three, Threefold, TOWERCAST, Towercom, TT-Network, Turkcell, have not to date explicitly extended to divesting
UFG Asset Management, UkrTower, Vertical, VICTUS Networks, Vimpelcom, Vodafone, Vodafone Procurement,
towers, but it seems plausible that either monetising
Wind, Wireless Infrastructure Group
network assets or divesting towers to reduce
competitive concerns might be a plausible extension
of their current strategies.
< Who’s who of 41 towercos and joint venture infrastructure sharing firms in Europe
Alticom: Dutch towerco with 24 towers and 9 masts
< Maps showing the footprints of Europe’s leading MNOs and commentaries on their history and
primarily at high altitudes (by Dutch standards!)
appetite to share towers
primarily used by broadcast tenants but also by
< An introduction to some of the most credible current and prospective investors into European towers
telecom operators for microwave links. Services
< An introduction to the TMT advisory firms with experience of tower transactions
include provision of power and cooling.

acquisition of E-Plus by Telefónica – we knew this 11 years with the predecessor of what is now UK
Altice was a likely scenario, so when we structured the and Dutch towerco Shere Group. More recently
transaction we made adjustments to be able to meet Arcus manages their own and other consortium
our objectives. Our German business continues to members’ investments in TDF, France’s largest
perform above the expectations we set out in our towerco with 9,950 sites. Arcus has an interest in
acquisition business case.” further opportunities in European towers which
may or may not be addressed through their existing
“We are very interested in further transaction platforms, depending on scale and geo.
opportunities in Germany, provided of course they
meet our investment criteria,” continued Hess. Arqiva: The largest independent towerco in the UK
“We feel it may make sense for an independent with around 10,550 active towers with a tenancy
towerco to be involved in the consolidation ratio around 2.5 and a portfolio of 16,500 in total,
and rationalisation of the other national tower of which less than 1,000 are pure broadcast sites.
portfolios.” Acquired by a Macquarie-led consortium in 2005,
into which was rollup up the NTL Broadcast and
Analysys Mason: Marco Cordoni and his team National Grid Wireless assets. Arqiva has over
at Analysys Mason are among the ‘go-to-guys’ for 2,000 employees and has deep I&C and O&M
America Movil: See Telekom Austria. tower market analysis and due diligence on a global competencies and resources spanning broadcast
basis, and Europe is no exception. and telecom. Arqiva is currently restructuring debt
American Tower: The world’s largest independent which could result in a change of strategic direction
commercial towerco, American Tower need no Antenna Hungaria: Hungary’s recently re- for the company.
introduction within this publication. Present Nationalised broadcast towerco also sells
in Europe to date only in Germany, where the co-locations to and provides installation and Ashmore: Another investment firm with an
company owns and operates a network of 2,031 maintenance services to telecom clients. appetite for telecom towers.
sites, the majority acquired in 2012 for €393mn
from KPN. Antin Infrastructure Partners: One of the first Axion: Operates 586 broadcast towers with some
movers in the European telecom tower asset class, telecom co-location in Spain, 70% of which are
“We liked the opportunity in Germany because of Antin are investors in FPS Towers which owns over in Andalucía. Owners Antin Infrastructure are
the size and economic stability of the market, the 2,000 towers and the rights to 15,000 rooftops in believed to be seeking to sell some or all of their
absence of other independent towercos, and an France, and Axion the leading broadcast towerco stake.
attractive valuation that allowed the portfolio to in Andalucía, Spain. Antin has appetite for further
yield over 8% on day one,” said Hal Hess, President European tower investments. Azerconnect: Infrasharing business in Azerbaijan.
of EMEA and Latin America for American Tower
in a August 2015 TowerXchange interview. “The Arcus Infrastructure Partners: Arcus has been Berkshire Partners: Berkshire backed Crown
acquisition made economic sense for us despite the an active investor in European towers for over Castle during their successful foray into European

towers in the late nineties, and currently has Brookfield Infrastructure Partners: Participated getting three or four tenants on a tower, it’s based
active investments in Protelindo (largest towerco in the consortium which acquired equity in TDF around the idea you can dismantle the tenants on
in Indonesia with a small footprint in the in 2014 and known to have an appetite for further an existing tower and transfer them to new sites,”
Netherlands), Torres Unidas (Andean region of opportunities in European towers. said David Bernal Cantero, BDM at Cellnex in a
CALA) and Tower Development Corporation in the recent TowerXchange interview.
US and Puerto Rico. BuyIn: A 50/50 procurement joint venture between
Deutsche Telekom and Orange with an annual “Our plan in Europe is diversification,” continued
Blackstone: Another serial towerco investor budget of €28bn across network technology and Bernal Cantero. “Germany is an attractive market
currently working with Phoenix Tower other telecom equipment categories. at the moment, reducing the number of operators
International in CALA with at least one other from four to three will shake things up. The UK is
investment in the asset class imminent, none of Capital Group: Another investor keen on the also interesting but it’s a very competitive market
which is in Europe leaving a vacancy in their telecom tower asset class, Capital Group has or had with strong incumbent towercos. France is a strong
stable! capital at work in Russian Towers as well as Eaton market with some MNO transactions in the pipeline
Towers in Africa. which might drive some changes in the market. We
Bouygues Telecom: Bouygues Telecom was see some good short term opportunities in Europe,
one of Europe’s first MNOs to sell towers to CEE Equity Partners: Investor exploring not only in the countries mentioned above but also
an independent towerco, selling 2,166 of their opportunities in CEE towers. in other European countries.”
estimated 17,000 towers to Antin’s FPS Towers
in 2012 for €185mn. Acquisition overtures from Cellnex Telecom: Catalysts for the opening of the České Radiokomunikace: With 1,000 access points
Altice, which already owns Numericable-SFR, European tower market, Cellnex (formerly Abertis across the Czech Republic, České Radiokomunikace
could result in the divestment of more towers. Telecom) have to date deployed over €1.2bn rolling provides structures and services to broadcast and
up a portfolio of 15,140 telecom and broadcast telecom clients. Owned by Macquarie.
Britannia Towers / Hibernian Towers: Privately towers across Spain and Italy. To put that into
owned towerco with 60 towers in the UK under context, the sum represents more than half the Česká Telekomunikační Infrastruktura (CETIN):
the Britannia brand, 60 towers in Ireland under total capital spent on European towers in the last When PPF acquired O2 Czech Republic from
Hibernian and a further 20 towers in Northern five years. Flush with capital and confidence from Telefónica in January 2014, they immediately
Ireland under Ulstercom. their successful IPO, Cellnex has a €multi-billion set about separating the retail assets from the
acquisition warchest. Although Cellnex dominates infrastructure, in the latter case creating CETIN
Broadcast Networks Europe: Association of 18 the European deal table, it still has plenty of room which was briefly listed on the Prague stock
broadcast companies operating in 21 European for growth in its existing markets: towercos own exchange prior to a squeeze out of minority
countries whose remit includes ensuring the just 18% of towers in Spain and 48% of Italy’s shareholders putting PPF as sole shareholders.
economic competitiveness of Europe’s broadcast towers. Telecom Italia’s Inwit could be Cellnex’s CETIN owns 20,000,000 km of metallic cable pairs,
networks, optimising platform developments and next acquisition target. 38,000km of fibre and 5,300 outdoor base stations
representing the industry with regards to policy plus 750 micro base stations, providing 99.6%
developments and regulatory intervention. “Our model (in Europe) is not based on the idea of population coverage. With O2 having set up a

network sharing agreement with T-Mobile prior infrastructure sharing business, the new CTIL EE: UK MNO joint venture between T-Mobile
to the carve out, CETIN have taken over O2’s role business now has around a £1bn of passive and Orange currently subject to a proposed
in managing the RAN sharing with T-Mobile assets on its balance sheet whilst also leading acquisition by BT which could destabilise the
the Beacon active infrastructure sharing project, country’s JV infrastructure sharing companies –
Cignal: Owns 115 towers developed for Hutch again between Vodafone and O2. Status of the in this case particularly MBNL.
in Ireland, plus the ground leases under a just JV remains unclear if the O2-Three merger is
under 300 other operator towers. Recently sold to approved. EI Towers: Broadcast towerco with a progressive
InfraVia prior to which it was known as Coillte. management team and an appetite to diversify
Deutsche Funkturm (DFMG): Towerco carved into telecoms – a strategy they are well under
Citi: One of the world’s leading tower transaction out of Deutsche Telekom in 2002. Their parent way in executing having acquired 700 telecom
advisory groups can be found within the TMT company remains their lead client representing towers from various small independent towercos
team at Citi. around a third of DFMG’s tenancies. Operates in Italy. Telecom now represents 8.9% of EI
26,000 sites, of which around half are rooftops. Towers’ revenues. EI Towers more recently made
Communication Infrastructure Partners: Deutsche Telekom has twice been rumored to be headlines for their aggressive but ultimately
Owners of Open Tower Company, which acquired on the brink of divesting DFMG, but to date the justifiable persuit of an acquisition of Italy’s other
601 towers from KPN in the Netherlands in two assets are retained on their balance sheet. broadcast towerco Rai Way – the combination
tranches in 2008 and 2010 for an undisclosed of the two entities could create tremendous
sum. Current tower count: 684. Digea: Greek broadcast towerco. efficiencies given the estimated 60% overlap in
their networks.
Crown Castle: Publicly listed U.S. towerco Crown Digita: Broadcast towerco from Finland.
Castle had a profitable foray into European Emitel: Polish broadcast towerco diversifying
towers between 1997 and 2003, acquiring a Digital Bridge: Serial tower entrepreneurs Mark into telecoms. Own 300-400 sites. Acquired by
£75mn revenue tower business from the BBC and Ganzi and Ben Jenkins are building another Alinda Capital Partners.
transforming it into a £233mn revenue tower empire having sold their last venture, GTP, to
business with a tenancy ratio of 2.9 by 2003, American Tower for US$4.8bn. Digital Bridge ESB Telecoms: Subsidiary of Irish National
selling it to National Grid Wireless for £1.1bn (just is an investment vehicle through which stakes power company ESB Networks developed to
over US$2bn). While Crown Castle has largely are invested in towercos around the world. operate telecom sites. Most of their sites, which
retrenched from their international strategy to Digital Bridge recently appointed Phil Cooper total around 400, are in substations.
deploy capital domestically diversifying into small as Managing Director EMEA, having previously
cells and fibre, TowerXchange would not rule out kicked the tyres on the opportunity to invest in ESN Group: Russian oil and gas, energy,
the U.S. giant returning to Europe. TDF. We expect Digital Bridge to have an active engineering and infrastructure giant founded by
investment / platform in Europe by Q2 2016. Grigory Berezkin. Had been interested to bid for
CTIL: Joint venture between Vodafone and O2 Vimpelcom’s Russian towers when the process
(Telefónica) in the UK with around 18,000 sites. ECS: Polish tower builder with an appetite to started and stopped in the past – interest in the
Predecessor Cornerstone established the passive move up the value chain. current process unknown.

ETB: Serbian broadcast towerco. Infrastructure Partners to acquire and manage just
over 2,000 towers acquired from Bouygues Telecom Hutchison / 3 Group
European Wireless Infrastructure Association – the company now owns 2,051 towers, primarily in
(EWIA): Trade association for independent rural areas. FPS is currently focusing solely on the
towercos in Europe whose members included (at French market.
time of press): American Tower Germany, Arqiva,
Axion, Cellnex, EI Towers, FPS Towers, Open Tower “We aim to push our development programme in
Company, PCIA, Protelindo Towers BV, Towercom both our rural and urban rooftop portfolios. FPS
and Wireless Infrastructure Group, whose CEO Scott now employs 70 people and we are expecting gross
Coates chairs the EWIA. revenue of more than €45 million for this year,
representing 30% growth in the last three years,”
EuroTower: Aspiring towerco for Europe with said Frederic Zimer, CEO of FPS Towers in a recent
big vision and a willingness to evolve the business TowerXchange interview. “In terms of rooftop
model to meet the needs of European MNOs. Yet to growth, we currently manage with exclusivity
close their first deal. around 20,000 and expect to reach 30-35,000 in
the next two years. Within this number we also
EY: TMT strategy and corporate finance advisory aim to have more than 1,000 rooftop sites owned
team with extensive experience of advising on outright. In terms of value added, we seek to own also owns UkrTower in the Ukraine, which has just
tower transactions. the rooftops and every site we have in our portfolio. under 400 sites.
FPS is a towerco and a towerco is an infrastructure
F2i: One of the largest infrastructure funds in investor and manager – we invest to grow our assets Goldman Sachs: Experienced advisors on tower
Europe, and owns a majority stake in Metroweb, and after that it’s a cash machine. That’s why we transactions and lenders to towercos.
which operates a fibre network in Milan and seek to replicate our rural model in urban areas,”
Lombardy. F2i was rumored to have bid for Wind’s concluded Zimer. Hardiman Telecommunications: A unique
towers ultimately acquired by Cellnex, and has been consultancy equally capable advising on
again linked with a bid for Inwit, possibly coming in Galata: Wind towerco acquired by Cellnex – see engineering and operational issues as they are
as partners of Cellnex. WIND Telecomunicazioni. on commercial strategy and corporate finance.
Extensive experience advising on both the buy-side
FMO: Dutch development bank 51% government Global Tower: Founded in 2006 as a subsidiary of and sell-side in tower transactions.
owned, 49% by commercial banks and financial Turkcell, Global Tower is the biggest infrastructure
institutions. Have invested in African towercos, not operator in Turkey with more than 23,000 points Hibernian Towers: See Britannia Towers.
yet in Europe, where Eastern Europe is a better fit of service, of which 7,500 are towers, the rest being
than the West given their developing market remit. rooftops and IBS. Tenants include GSM and fixed- Highpoint: See Obelisk Group.
based operators, TV and radio broadcasters, public
FPS Towers: FPS was formed in 2012 by Antin institutions and service providers. Global Tower Hutchison: MNO typically operating under the

brand 3. Active in Europe in Italy, the UK, Sweden, African tower industry – Dan advised on 11 of the KPN: Leading telecom and IT service provider in
Denmark, Austria and Ireland. Hutchison has first 13 deals to close in Africa. The Netherlands. Sold a total of 1,322 Dutch towers
sold four tranches of towers in Indonesia to in four tranches between 2008 and 2012 to Open
Protelindo and STP, but has not yet completed Inwit (Infrastrutture Wireless Italiane S.p.A.): Tower Company, Shere Group and Protelindo. Sold
any divestments in Europe, although they Telecom Italia carved out Inwit as an independent a further 2,031 towers in Germany to American
have participated in infrastructure sharing JVs towerco and listed 40% of the equity in the Tower in 2012 before the sale of their German
such as MOSAIC in Ireland and MBNL in the company in a successful IPO on the Milan stock subsidiary, E-Plus, to Telefónica in October 2014.
UK. Speculation suggests that the merger of exchange, raising €875.3mn. Telecom Italia has
Vimpelcom’s Wind and Hutchison’s 3 Italia may since commenced a process to sell a further 45% of KPR Consult: Renowned ‘tower doctors’ – go-
result in the sale of Hutchison’s 8,000 towers in the equity in the company to a third party, with EI to guys for structural / technical due diligence,
Italy, while the proposed merger of Three and Towers, Cellnex and F2i (the latter two reportedly improvement capex planning, decommissioning
O2 in the UK may also precipitate the separation in a joint bid) believed to be interested. RBC and just about anything to do with tower design
of towers, either at the bequest of regulators, reports that approximately 5,000 of Cellnex’s towers and maintenance. KPR also manage a significant
or to satisfy Three UK’s investors’ liquidity overlap with Inwit’s, suggesting substantial scope proportion of the towers in Denmark through co-
requirements. for rationalization. location management agreements.
InfraVia Capital Partners: Acquired Coillte’s Inwit operates 11,519 towers in Italy, of which Levira: Estonian broadcast towerco, data centre,
300 sites in August 2015 for an undisclosed sum, 7,400 are in suburban or rural areas, commanding network, cloud and media service provider. 51%
renaming the company Cignal. a €1577 lease rate, and 4,100 in urban areas, with owned by the government, 49% by TDF. Owns 22
a €2297 lease rate. At the time of the IPO, Inwit’s transmitter towers across Estonia and provides co-
ING Commercial Banking: Leading Dutch bank tenancy ratio was 1.55, with Telecom Italia as their location services to MNOs.
with considerable experience of providing debt anchor tenant, Vodafone as their primary second
finance to the tower industry. tenant and around 1,500 Wind tenancies Link Development: Operates over 300 towers,
primarily in Northwest Russia, supplemented by a
International Finance Corporation (IFC): The ITAS TIM: Family owned towerco which operates growing fleet of smart poles.
IFC is a member of the World Bank Group, the 420 towers in France with a combination of
world’s leading DFI. The IFC has invested around broadcast, radio, M2M, WiMAX and MNO tenants. Logycom Group: The first independent towerco in
half a billion dollars in debt and equity into Kazakhstan, with a contract for their first 100 BTS
eight towercos across emerging markets, with an J.P. Morgan: Leading TMT advisory team with towers.
objective to double that total investment by 2018. extensive experience in towers, including some of
IFC’s exposure in Europe to date is a US$20mn the landmark European transactions. Macquarie Group: Serial towerco investors, with
equity investment into Russian Towers. capital at work in Europe within Arqiva and Russian
Konsing Group: Serbian managed service provider Towers, and farther afield with Axicom (formerly
Intrepid Advisory Partners: Advisory firm active in multiple European markets, also own and Crown Castle Australia), Mexico Tower Partners
established by Daniel Lee, the “Rainmaker” of the operate 74 towers in their home country. and Viom Networks (soon to be part of ATC India).

register and planning to carve out around 14,000 Norkring: Wholly owned subsidiary of Telenor
MTS coverage towers into a towerco, perhaps with a view to an which owns both the Norweigan and Belgian
IPO or sale and leaseback. “This is a good idea, broadcast towercos. Norkring has 2,750
because operators all over the world spin off their transmission stations across Norway, with space
passive infrastructure to invest the money into leased to broadcasters, MNOs, broadband and
what brings higher margins. We are also studying public service providers. Norkring Belgie is 25%
this option,” MegaFon CEO Ivan Tavrin said in owned by PMV, itself owned by the Flemish
October. “We are starting the project, but it will government.
certainly take more than a quarter,” he added.
Obelisk Group: Obelisk Group is a diversified
MOSAIC: Vehicle for the infrastructure sharing energy and telecoms EPC contractor which also
partnership between Three and Eircom in Ireland. owns Highpoint, a towerco which markets and
Assets remain on the balance sheets of the MNOs. manages more than 150 sites in Ireland.
Mott MacDonald: Digital Infrastructure team OIV: Croatian broadcast towerco which offers co-
has extensive experience of advising on tower location to MNOs from 218 sites.
transactions and investments.
Open Tower Company: See Communication
MTS: Unlike their competitors, Russian market Infrastructure Partners.
Macquarie also has an excellent TMT advisory leading MNO MTS has yet to provide any hints of
practice with experience of advising on tower potential appetite to monetise their towers. Orange: One of Europe’s largest MNOs with
transactions. a footprint across France, Spain, Belgium,
Net4Mobility: Swedish joint venture infrastructure Luxembourg, Germany, Poland, Slovakia,
MBNL: Joint venture between EE and Three sharing firm founded in 2009 by Telenor and Tele2. Moldova, Romania, Ireland and the UK, where
(Hutchison) in the UK with around 18,000 sites, they are a 50% shareholder in EE. Orange has
although the assets remain on its shareholders’ NetShare: Former Vodafone-Three Ireland JV from agreed active infrastructure sharing deals in
balance sheets. Status of the JV remains unclear if which Three were compelled to exit under the Spain, Poland and Romania, and has partnered
the O2-Three and BT-EE mergers are approved. terms of their merger with O2. NetShare continues with Three to create MBNL in the UK. While
to administer the Vodafone network. Orange has partnered with independent towercos
Media Broadcast: Broadcast towerco operating in Africa, agreeing ‘manage with license to lease’
over 300 transmitters across Germany. Media NetWorkS! 50-50 Polish joint venture deals with IHS in Cameroon and Cote d’Ivoire and
Broadcast was separated from TDF in April 2015. infrastructure sharing firm responsible for the selling towers to Eaton Towers in Uganda and
management of T-Mobile and Orange’s networks. Egypt, the MNO has not yet extended their passive
MegaFon: Number two MNO in Russia, announced When launched in 2011, and prior to consolidation, infrastructure monetisation strategy to Europe.
in October 2015 that they were auditing their asset NetWorkS! managed 10,000 base stations. That may change in 2016, with rumors of Orange

in 2015 that Portugal Telecom might be interested in of their sites, as well as towerco’s usual “non-
Orange coverage selling 2-3,000 towers, but no deal crystalised. traditional MNO” tenants: emergency services and
fixed wireless access operators.
PPF: Investment fund founded by the richest man
in the Czech Republic Petr Kellner. PPF acquired O2 Rai Way has been the subject of much consolidation
Czech Republic and spun off it’s infrastructure as speculation. EI Towers’ initial interest in acquiring
CETIN. Rai Way earlier in 2015 was met with a distinctly
negative response by government stakeholders.
Protelindo: Brainchild of Michael Gearon and his Whilst Rai Way is an autonomous business with it’s
loyal management team, Protelindo is the largest own decision making authority, when it comes to
towerco in Indonesia where they own over 11,500 M&A, the State remains a critical stakeholder
towers. Protelindo acquired 261 towers from KPN in
the Netherlands in 2012 for €75mn. Rothschild: Investment and advisory firm with a
strong pedigree in European towers.
Providence Equity: Communications and media
Orange branded as ‘Orange’ across Europe, and as EE
(company owned 50% with T-Mobile) in the UK investment specialists with capital at work in Indus RTRS: State-owned Russian television and
Towers (India), Grupo Torresur (Brazil) and KIN broadcasting network with some MNO tenants on
being interested to sell their towers in Spain and (Indonesia). Expect Providence to have considerable their towers, but they don’t seem to be proactively
Poland. interest in European towers. promoting co-location.
ORS: Austrian broadcast towerco carved out of Quippo International: The ownership team Russian Towers: Leading independent towerco in
national broadcaster ORF in 2005. ORF still owns behind Viom Networks in India, now seeking Russia with around 1,600 towers. Russian Towers
60%, with Medicur Sendeanlagen, part of Raiffeisen new international opportunities following their have a unique partnership with the Russian
group, owning the balance. ORS’s 450 transmitter successful exit and sale to American Tower. Railway enabling them to build along the railway
sites are offered for co-location by MNOs. Believed to have an appetite for opportunities in infrastructure, while more recently they have
Russia, among other markets. deployed a number of multi-tenant light poles.
PA Consulting: Consulting, technology and Auspicious roster of backers includes UFG, EBRD,
innovation firm, advising operators, infrastructure Radicom: Broadcast towerco from Romania. IFC, Macquarie, ADM Capital and Sumitomo
owners and investors on strategic decisions. Have Corporation. Will be a leading contender to acquire
extensive experience in tower transactions; acting Rai Way: Listed Italian broadcast towerco with Vimpelcom and MegaFon towers, if they come to
as advisors to both buy and sell-side 2,300 towers delivering 99% coverage. Manages market, and could extend their footprint into the
both active and passive infrastructure for their CIS if the right opportunity presents itself.
Portugal Telecom: Largest telecom service broadcast clients. Since Q4 2014 Rai Way have
provider in Portugal. Acquired by Altice for €7.4bn dedicated resources to leasing up their existing SBA Communications: Publicly listed US towerco
in June 2015. Rumors circulated in 2014 and again towers, and report having MNO tenants on ~700 with over 25,000 towers in North and South

the Netherlands, the Czech Republic and the UK
T Mobile coverage (through their 50% stake in EE). T-Mobile has not Tele2
yet sold any towers in Europe but has done in the
US, where they also operate their own towerco
T-Mobile Towers.
TAP Advisors: Boutique M&A and investment

advisory firm with long history of advising on tower
deals, including advising Inwit on their IPO.
TDF (Télédiffusion de France): Leading French

towerco with 9,950 sites and over 2,000 employees.
Refinanced in March 2015 with Brookfield, APG,
PSP, Arcus Infrastructure and Credit Agricole
T-Mobile branded as T-Mobile in Austria, Croatia, Czech becoming shareholders. In recent years TDF has to a nationwide player. Tele2 Russia is building
Republic, Hungary, Montenegro, Netherlands and Poland, refocused on their domestic French market and around 1,000 towers per year itself and leveraging
branded as Telekom in Albania, Germany, Macedonia and
Slovakia and as EE (company owned 50% with Orange) in has less appetite for international opportunities, co-location to accelerate time to market. Tele2’s
the UK selling broadcast towercos Axion (Spain), Alticom network investments are driving Russian towerco
(Netherlands), Digita (Finland), Antenna Hungaria expansion, for example Russian Towers derives
America. No presence in Europe. Yet. (Hungary) and separating Media Broadcast 37.6% of its revenue from Tele2 Russia compared to
(Germany). In 2014-15 41.2% of TDF’s revenues 19% from Vimpelcom, 17.7% from MTS and 13.1%
Service Telecom: Towerco with over 100 towers came from telecom, 30.3% from TV and 18.3% from from Megafon.
and microsites in Moscow. radio broadcast.
Tele2 Russia’s low cost business model has made
Shere Group: Independent towerco owned by Tele2: Tele2 has undertaken active infrastructure some early market share inroads and forced
Arcus Infrastructure with 860 towers across the UK sharing with Telenor in Sweden and passive Russia’s three incumbent operators to increase their
and the Netherlands. infrastructure sharing with T-Mobile in The own network capex. Introduced services in Moscow
Netherlands, but has not to date sold any towers. and Moscow Oblast in October 2015 having built a
SUNAB: Active infrastructure sharing joint venture Tele2 exited the Russian operator of the same name formidable network of 5,000 3G and 2,000 LTE base
between Tele2 and TeliaSonera in Sweden. in 2013, the latest in a series of divestments. stations.
Swisscom: Swiss broadcast towerco. Tele2 Russia: Joint venture between Rostelcom Telefónica: Spanish owned multinational MNO
(45%), VTB Group and a consortium of investors, Telefónica has made the headlines by carving out its
T-Mobile: Leading European MNO which has which owns 55%. Tele2 Russia is driving network 11,500 Spanish towers into a new entity - Wireless
been involved in network sharing JVs in Poland, investments in Russia as it expands from a regional Towers, and are following a dual strategy approach

ultimately to Deutsche Funkturm.
Telefonica coverage Telekom Austria
Telefonica
Telefónica has also sold a total of over 9,000 towers
in Brazil, Mexico, Chile and Colombia, raising a total
of over US$1.5bn.
Telemont: Leading Russian tower I&C and O&M

subcontractor.
Telenor: Multinational Norwegian owned MNO

Telenor has shared infrastructure all over its
footprint, but has tended to partner with towercos
in greenfield launches, such as the launch of Uninor
(now Telenor India) and the launch of Telenor
Myanmar. Within established markets, Telenor has
Telefonica branded as O2 in UK, Ireland, Germany, seemingly preferred to retain towers and instead
Slovakia and Czech Republic and as Movistar in Spain. Majority form active infrastructure sharing partnerships
stakes in O2 Czech Republic and Slovakia sold to PPF which
currently still trades under the O2 brand.
Telenor coverage such as with TeliaSonera in Denmark and with
to either list or sell the newly created infrastructure Tele2 and Hutchison in Sweden.
business.
Telekom Austria: America Movil owns a 59.7%
Following rumours that a potential 60,000 stake in €4bn MNO Telekom Austria, which has a
Telefónica assets could be for sale, it is widely footprint across Austria, Slovenia, Croatia, Serbia,
thought that they will follow a similar approach in Macedonia, Bulgaria and Belarus. TowerXchange
Germany where it is estimated they have a further have picked up the first hints that Telekom Austria
10-12,000 towers remaining. might be receptive to some form of infrastructure
outsourcing deal, possibly involving passive and
Telefónica has already sold 500 towers in Spain active equipment.
to Abertis (now Cellnex) in 2012 before a further
bundle of 4,277 Telefónica and Yoigo towers TeliaSonera: TeliaSonera has completed one
was sold to the same company in 2014, raising tower transaction to date in Europe – their Spain
€385mn. Telefónica’s acquisition of E-Plus from subsidiary Yoigo contributed some of the 4,277
KPN in Germany precipitated the transfer of 7,700 Telenor branded as Telenor in Denmark, Hungary, Montenegro, Telefónica and Yoigo towers sold to Cellnex in 2014.
Serbia, Sweden and Norway and as Globul in Bulgaria
sites – mostly rooftops – to Deutsche Telekom and TeliaSonera has engaged in active infrastructure

Three Italy: The merger of Vimpelcom’s Wind shareholders of Russian Towers.
Teliasonera coverage and Hutchison’s 3 Italia may result in the sale of
Hutchison’s 8,000 towers in Italy. UkrTower: The first and only towerco in Ukraine,
providing around 400 towers and IBS to MNOs,
Three UK and Ireland Ireland: Three’s merger television and radio broadcasters and civil and
with Telefónica’s O2 in Ireland precipitated Three military wireless communication operators.
exiting the NetShare joint venture with Vodafone
– could this be a precedent for a similar outcome Vertical: Russian towerco, formed in 2013,
should Three and O2 merge in the UK also, forcing experienced large growth in 2015, acquiring
Three to exit CTIL? and refurbishing over 500 sites, leaving them
with a portfolio of 1600 sites. Wholly owned by
Threefold: Leading Irish tower I&C and O&M the company founder, the company has a heavy
Teliasonera branded as Telia and Callme in Denmark, EMT firm which led the buyout of Eircom’s mast focus on the Moscow region and has in addition
and Diil in Estonia, Sonera and TeleFinland in Finland, Geocell infrastructure in 2007, and the subsequent completed a number of build to suit programmes
in Georgia, Kcell and Activ in Kazakhstan, LMT and Amigo in
Latvia, Omnitel and Ezys in Lithuania, Moldcell in Moldova,
establishment of Towercom. Threefold now for multiple MNOs in rural areas.
Netcom, Chess, OneCall and MyCall in Norway, Yoigo in Spain, provides tower strategy advice to stakeholders
Telia and Halebop in Sweden, Tcell in Tajikistan and Ucell in across Europe and beyond. VICTUS Networks: Network sharing joint venture
Uzbekistan
created in 2014 with 50-50 participation between
sharing partnerships in Denmark, with Telenor, TOWERCAST: French broadcast towerco owned by Vodafone Greece and Wind Hellas. Uses a partial
and in Finland, with DNA. TeliaSonera’s proposed NRJ Group. Also sells co-location to telecom clients. MORAN business model.
merger with Telenor in Denmark, which may
have shaken loose some towers, has been called Towercom: Towerco in the Republic of Ireland Vimpelcom: Kick started the current phase of
off. However the acquisition of Tele2 Norway carved out and sold by Eircom in 2007. Operates European tower sales with the sale and leaseback of
has been closed, with network integration over 400 towers. Sold to the Irish Infrastructure 7,377 towers from their Italian opco Wind to Cellnex
ongoing – anticipate some towers being sold or Fund in 2013. for €693mn in 2015. Vimpelcom has subsequently
decommissioned as a result. commenced processes to sell 10,400 towers (and up
TT-Network: Danish infrastructure sharing joint to 19,000 rooftop sites) in Russia - receiving 8 offers
TeliaSonera recently appointed UBS to explore venture with around 2,500 towers established in and processes also under way in Bangladesh and
their potential exit from Kazakhstan, Uzbekistan, 2012 by TeliaSonera and Telenor. Pakistan. Vimpelcom may subsequently divest tens
Azerbaijan, Tajikistan, Nepal, Georgia and Moldova, of thousands of towers in Armenia, Kyrgyzstan,
enabling the group to sharpen its focus on the rest Turkcell: Leading MNO in Turkey. Carved out and Uzbekistan, Tajikistan, Kazakhstan, Ukraine and
of Europe and the Nordics. retained their own towerco, Global Tower, in 2006. Georgia.
Teracom: Broadcast towerco for Denmark and UFG Asset Management: Russian focused Vodafone: Vodafone is an advocate of
Sweden. alternative investment group is one of the founding infrastructure sharing and has entered into passive

investors Wood Creek Capital Management remain
Vimpelcom coverage Vodafone coverage acquisitive.
“If we get to half the level of outsourcing as the US

market there would be an additional 100,000 towers
owned by towercos,” said WIG CEO Scott Coates.
“The opportunity also extends beyond towers – WIG
for example has an active DAS business and we are
looking at outdoor small cell networks for cities
in the UK. Whether it’s towers or small cells, the
wholesale sector has a major role to play in the next
chapter of European wireless networks.”
Wireless Towers: Formed in January 2016,

Wireless Towers in Telefonica’s newly created
Spanish infrastructure business which manages the
Vimpelcom branded as Beeline in Russia, Armenia, Kazakhstan,
Georgia, Kyrgyzstan, Tajikistan and Uzbekistan, Wind in Italy and company’s 11,500 towers in the country. Telefonica
Kyivstar in Ukraine are looking at a potential sale or listing of the
business, employing a dual strategy approach, in
infrastructure sharing JVs in the UK (CTIL) and annum, and provides procurement services to third order to reduce its debt burden
Ireland (NetShare), as well as active infrastructure parties, including independent towercos.
sharing deals in Greece, Romania, Spain and again Who have we missed?
in the UK. Wind Telecomunicazioni: Vimpelcom’s Italian
opco whose towerco Galata was sold to Cellnex in Advance apologies: we’re bound to have missed
Apart from Vodafone India’s participation in 2015, with Wind retaining a 15% equity stake, as one or two key stakeholders in European
Indus Towers in India, a sale and leaseback deal well as a small proportion of the towers. Wind is towers – if so we’d like to know as we’re on a
in Tanzania through subsidiary Vodacom, and currently engaged in a merger with Hutchison’s 3 mission to assemble everyone at the inaugural
a manage with license to lease deal in Ghana, Italia, which could shake loose more towers. TowerXchange Meetup Europe on April 12-
Vodafone has not entered into deep partnerships 13 in London (see www.towerxchange.com/
with towercos. Wireless Infrastructure Group (WIG): One of meetups/meetup-europe)! If you feel your
Europe’s most entrepreneurial middle-market company should be profiled in the TowerXchange
Vodafone Procurement Company (VPC): Vodafone towercos, WIG became a bona fide towerco in 2007. who’s who in European towers, please email
founded VPC in 2008 to leverage scale and a leaner Through a combination of organic growth and small Laura Dinnewell, Head of TowerXchange Europe,
procurement and SCM model. VPC administers a to mid-sized acquisitions, WIG has grown a portfolio at: ldinnewell@towerxchange.com.
total procurement budget in excess of €20bn per of over 2,000 active sites. The company and their

A new breed of European towerco TowerXchange: Cellnex Telecom has become
Europe’s largest independent towerco in a little
over three years. Can you tell us about how that
Insights into Cellnex’s towerco origins, how the deal was done and what’s next for this
came about?
exciting European towerco
David Bernal Cantero, Business Development
Manager, Cellnex Telecom: We launched the pure
Abertis’ (referred to in this article as Cellnex following
tower business three years ago but before that, several
Total sites: an IPO of Abertis’ tower business in May 2015) deal with
years ago, we were actually going after different
15,170 Wind was announced formally in early March, during
mobile operators’ towers in different countries
Mobile World Congress 2015. Amongst the hubbub of
(mainly in Latin America) to analyze different tower
product launches and Silicon Valley celebrities, a deal for
schemes. (On one hand an asset acquisition from
the acquisition of telecoms towers in Italy might not seem
the mobile operator and on the other hand to set up
headline news, but if you dig deeper this announcement
7,472 sites could well mark the beginning of something rather a vehicle which would have different tower assets
exciting for the European market. Thus far slow to from different markets with the same operator). We’d
transfer assets from operator-captive to third party chased some of the towers but some of the operators
towercos, Europe has lacked a truly international force took the decision to sell the towers on a country by
to champion the towerco model which has worked with country basis rather than all at once and as a result it
7,698 sites such success in the US, Africa, Asia and Latin America. became a very competitive process.
While Cellnex’s plans are still in their infancy, it’s clear
scope of their ambition could be a catalyst which will At that time we thought that instead of competing in
see significant change taking place in European telecoms emerging markets we should be focused on mature
infrastructure over the next few years. markets in order to deploy our tower industry
proposal. We analysed and tried to learn from the
Keywords: Abertis, Acquisition, Anchor Tenant, Business Model, Cellnex, Co-Locations, Deal Structure, profile of the main actors - our competitors too -
Decommissioning, Europe, Infrastructure Funds, Infrastructure Sharing, Interview, Italy, Market Overview, within this market. They had a higher appetite for
Opex Reduction, Regulation, Sale & Leaseback, Spain, Tenancy Ratios, Towercos, Transfer Assets, Valuation risk (for example going into emerging markets) and
they were backed up by a strong presence in the
growing US market. Once we reached this conclusion
Read this article to learn: we decided to pull out and focus on Europe, which is
< How Cellnex’ tower origins (formerly as Abertis Telecom) in LatAm drove their European strategy our home ground and is more difficult for companies
< European regulations and their impact on tenancy ratios coming in from other regions as it’s based more on
< The reasoning behind Abertis’ IPO of Cellnex consolidation than on growth. Our model here is not
< What events in the Italian market mean for competition based on the idea of getting three or four tenants on
a tower, it’s based around the idea you can dismantle

the tenants on an existing tower and transfer them to diversification. Germany is an attractive market at into account at the time you plan a consolidation
new sites. Europe is a mature market and different the moment, reducing the number of operators from process between two different networks. Anyway,
to any other market – European investors aren’t used four to three will shake things up. The UK is also what it doesn’t make sense is to have different towers
to the level of risk you get in markets like Africa so interesting but it’s a very competitive market with at the same place because first the value of this
you need to build up the business step by step, you strong incumbent towercos. France is a strong market overdimensioned infrastructure is low and the market
can’t go all at once. We want to invest in Europe, with some MNO transactions in the pipeline which players burden become burdened with inefficiencies.
reach a certain volume and then deploy our industrial might drive some changes in the market. We see some
knowledge elsewhere. good short term opportunities in Europe, not only TowerXchange: You mentioned decommissioning
in the countries mentioned above but also in other earlier, is that something Cellnex is very involved
TowerXchange: Was this also the reasoning behind European countries. It doesn’t make sense to have in?
your IPO for Abertis’ tower business? three or even four competing networks in a market so
some consolidation will need to take place to capture David Bernal Cantero, Business Development
David Bernal Cantero, Business Development all the value and be shared between the different Manager, Cellnex Telecom: Decommissioning is a hot
Manager, Cellnex Telecom: For Abertis, telecoms was players, telecom operators and tower companies. topic in Italy. In Spain there are three main MNOs and
a part of the wider business, Abertis invests heavily in The challenge for us there will be to protect our a fourth one with a small number of towers, and Italy
the motorway side of the business as well. The drivers transactions from a possible tenant dropping out of has four full networks (one of which has sold part
for the telecom business are very different from the the market. of its network to Cellnex) of which the smallest has
motorways part of the business and that was the 8,000 towers. With 40,000 towers in Italy you’ll have to
assessment by the market too. TowerXchange: What kind of tenancy ratios do you dismantle some of them, particularly as the towerco
think are achievable in Europe? model grows. We are involved in the analysis of the
That’s one of the reasons that drove Abertis’ decommissioning of overlapped towers in different
decision to let Cellnex float: i.e. facilitate its ability David Bernal Cantero, Business Development Manager, countries, we could dismantle the tower and move
to encompass growth opportunities in the telecom Cellnex Telecom: In terms of tenancy ratios in Europe, a tenant’s equipment for them if we have a tower
markets while having a flexible and efficient financial there are a lot of factors at play. in a better location nearby which increases market
mechanism through being a quoted company. Now value for them and maintains the level of quality
we are independent we can focus on expanding our One which isn’t really an issue in places like Africa and coverage – MNOs right now value savings over
frontiers and access to the financial markets and a are the regulations around magnetic emissions. In assets and that’s what the towerco model offers them
specific type of investors. Italy the restrictions are stringent and the levels limit in addition to some cash in to cover different type of
the capacity to host tenants. It means you can’t have costs.
TowerXchange: You say you’re keen to establish a more than three tenants on each tower at the most
base in Europe first, what are your plans for the but it depends on location of the towers (levels are TowerXchange: How much of the Wind tower
European market? lower close to hospitals or other critical places). These portfolio have you acquired?
restrictions vary dramatically country to country
David Bernal Cantero, Business Development so the effect on tenancy ratios will vary but it’s a David Bernal Cantero, Business Development
Manager, Cellnex Telecom: Our plan in Europe is clear consideration in Europe and should be taken Manager, Cellnex Telecom: We didn’t acquire all the

Wind towers, we acquired around 60% of the total. It
depends on the attractiveness of the site. In this deal
Wind pre-selected the most interesting sites which
were offered for sale. They originally proposed around Tuesday 12 and Wednesday 13 April, Business Design Centre, London
6,000 towers and then they increased the number of
towers to make the transaction more attractive.
TowerXchange: How do you see the Wind

acquisition changing the tenancy mix of your
Meetup Europe 2016
Italian portfolio (Abertis bought 300 towers from
A unique networking opportunity with 200 leaders of the European telecom and broadcast tower industry
Atlantia in 2014)?
David Bernal Cantero, Business Development Manager,

Cellnex Telecom: The TowerCo acquisition was
completed in May 2014 so we did have assets in Italy
already but it’s a very different business. TowerCo’s
towers are focussed on motorways and tunnels, not
typical towerco assets at all. They also manage a
portfolio of real estate which is rented to operators
for their own tower portfolios. TowerCo has just
300 towers so of course the acquisition of the Wind
portfolio will dilute the tenancy mix significantly.
TowerXchange: How do you see the competitive

landscape in Italy now?
David Bernal Cantero, Business Development To discuss your participation, contact Annabelle on +44 7423 512588 or
Manager, Cellnex Telecom: Italy is a competitive
environment and has very high mobile penetration
email amayhew@towerxchange.com
but there’s a situation based on the fact that there GOLD SPONSOR: Silver Sponsors: Bronze sponsors: Exhibitors:
are a lot of small companies with small portfolios of
maybe 10-50 towers which means you have local or
Endorsed by:
regional concurrence. Anyway, it gives you the chance Organised by:
to build an industrial project and consolidate the

different existing networks

Carving out O2 Czech Republic’s TowerXchange: Please can you provide a brief
introduction to your background and how you
got into the telecoms sector?
infrastructure business Petr Slováček, CEO, CETIN: I graduated
An interview with CETIN CEO Petr Slováček from the Technical University, Prague, with
a degree in telecommunications and then
obtained a postgraduate Master of Business
Česká Telekomunikační Infrastruktura (CETIN) manages the largest
Telecommunications at the Technical University of
telecommunication network in the Czech Republic comprising of
Delft in the Netherlands. After graduation I joined
5,300 towers, with access to a further 5,000 through a network sharing
the Telecommunications Research Institute in
agreement with T-Mobile, 20,000,000 km of metallic cable pairs and
Prague, prior to joining SPT TELECOM (the previous
38,000 km of optic cable. The company was formed in 2015 following commercial name of O2 Czech Republic) in 1989,
a spin out of O2 Czech Republic’s infrastructure business. Following a working in switching, technical development,
brief stint trading on the Prague Stock Exchange, CETIN is now wholly network management projects and OSS. In O2 Czech
owned by investors PPF. In this interview we talk with CETIN CEO, Republic, I was in charge of the Infrastructure and
Petr Slováček to discuss the details behind the successful carve out and Wholesale Division and a member of the Board of
delve into the company’s business strategy in the Czech Republic. Directors from 2003, serving as Vice Chairman from
June 2008 - March 2014. Since June of last year I am
now the Vice Chairman of the Board of Directors
Keywords: 3G, 4G, Active Equipment, Active Infrasharing, Business
and CEO of CETIN
Case, C-Level Perspective, Carve Out, CETIN, Core Network, Backhaul
& FTTT, Czech Republic, Deal Structure, Decommissioning, Europe,
TowerXchange: Please introduce CETIN - how
Europe Insights, Infrastructure Sharing, Insights, Masts & Towers, MNOs,
would you describe the company’s business
Network Rollout, O2, Operator-Led JV, Passive Equipment, Regulation,
model? Do you see yourselves as a ‘towerco’, an
Tenancy Ratios, Tower Count, Towercos
Petr Slováček, CEO, CETIN
‘infraco’ or something entirely unique?
Petr Slováček, CEO, CETIN: CETIN (short for Česká

Read this article to learn: telekomunikační infrastruktura) was created in
June of last year when it separated out from O2
< Who CETIN are and what role they play in the Czech telecoms sector
in the Czech Republic. We manage and operate
< What motivated the separation of the infrastructure and retail businesses
the largest telecommunications network in the
< How CETIN’s separation from O2 impacted on their network sharing agreement with T-Mobile Czech Republic, consisting of 20,000,000 km of
< Why trading of CETIN on the Prague Stock Exchange was terminated in January 2016 metallic cable pairs, 38,000 km of optic cables,
< What synergies exist between sharing towers and networks and sharing backbone and last mile fibre 5300 macro towers and 750 micro-sites. We would
class ourselves as an infrastructure provider

rather than a towerco as we also own and operate enough of O2, what is crucial for CETIN, as we are TowerXchange: How has the regulator responded
both the active and passive infrastructure as well not active in the retail segment, fulfilment of our to the creation of CETIN? For example, how is the
as the connectivity between towers. We are an regulatory obligations will be easier. business licensed?
autonomous and fully independent wholesaler,
entirely separate from O2 out of which we were The separation was completely voluntary and Petr Slováček, CEO, CETIN: The telecom regulator
separated through corporate spin-off as of June based purely on business merits. CETIN can now has been generally favorable to the separation
2015. We provide open access to the network plan on more appropriate investment horizons, and has adopted a very pragmatic approach to the
offering fair and equal conditions to all operators looking for an ROI within a longer 5-10 year period assignment of regulatory obligations between O2
(B2B). We do not sell to end customers (B2C). which better suits our business model. This helps and CETIN. We have been registered with the Czech
significantly with setting our network plans - we regulator for the provision of fixed network and
TowerXchange: What motivated O2 to separate have, for example, just approved a seven year services.
CETIN as an infrastructure business from their investment of US$900mn in backbone and FTTC.
retained retail business? TowerXchange: I understand O2 and
What is necessary to emphasise from the T-Mobile have had a deep network sharing
Petr Slováček, CEO, CETIN: The decision was competition office and other regulator´s points partnership (governing both active and passive
suggested by O2’s board of directors to separate the of interests – the separation of O2 and CETIN is infrastructure) since your joint 3G rollout,
business for a couple of reasons. As a former CTO not only of a corporate character. The separated extending to accelerate time to market for 4G.
at O2 I appreciate the advantages offered by the companies have the same owner but apart from How does the creation of CETIN affect that
separation very well (both for O2 and CETIN). that they are fully independent. PPF, as the owner partnership with T-Mobile?
of majority of shares in both companies, does treat
Firstly, decision-making within a vertically O2 only as a financial investment, only CETIN is Petr Slováček, CEO, CETIN: O2 set in place a network
integrated company always involves a number of part of the PPF group. After the separation was sharing agreement governing both passive and
compromises – the telco and infrastructure part completed, we have separated HR and legal teams, active infrastructure with T-Mobile across 10,000
of the operator have to certain extent different we have moved to separate premises, there is no macro sites (of which 35-40% are targeted to be
business targets with different investment horizons overlap in our boards of directors or supervisory decommissioned). The creation of CETIN did
and different amounts of customers. Separating board and so we are two entirely separate entities. not affect the cooperation. We act as a complete
these two parts of the business enables each to We are also different economic units from the network outsourcing provider for O2CZ in terms of
make decisions independently which are in their competition regulation perspective. RAN and took over the network sharing agreement
own better interests. in full. From that point of view nothing changed in
The whole process was realised in less than a the operating model or management of different
Also from the regulatory point of view it is better to year. Other attempts to make similar (although areas. We are only now the only contractual partner
have these two businesses separated – most of the not such total) separations in various countries to T-Mobile instead of O2.
regulation applies to CETIN, O2 in the future will have not been completed to such a standard as
only be slightly regulated. This frees up O2 to make ours as well or in such record time. O2 has been We continuously look for ways to deepen and
decisions in relation to retail price determination, granted several awards for the completion of the expand the cooperation with other operators in
balancing of the services portfolio, etc. But that is separation. order to bring better services to more customers,

accelerate deployment of 4G, reduce environmental exclusion of retail. Exchange on 1 June 2015 - what can you tell us
impacts of the networks, etc. about the ownership and investability of CETIN?
TowerXchange: I understand CETIN will invest
TowerXchange: Beyond the aforementioned just under US$900mn over the next seven years, Petr Slováček, CEO, CETIN: CETIN is not listed on
network sharing agreement, is there a culture in backbone and FTTC. What do you see as the the regulated market of the Prague Stock Exchange.
of infrastructure sharing in the Czech Republic? synergies between sharing towers and networks It was the activity of other independent parties
Do you foresee opportunities for more co- and sharing backbone and last mile fibre - which registered our shares to be traded on the
locations beyond T-Mobile? should all these assets be managed by the same un-regulated market of the Prague Stock Exchange
company and provided on a wholesale basis to and we had no influence of the fact. In any event,
Petr Slováček, CEO, CETIN: Whilst the CETIN - all retail operators? since 4th January 2016 trading of CETIN shares on
T-Mobile network sharing agreement is a major this market was terminated due to the squeeze out
one, even before this hundreds of sites were used Petr Slováček, CEO, CETIN: I do not see a reason of minority shareholders at the General Meeting of
by multiple parties – I would estimate at least 20% why not. Although this is not the case in the Czech CETIN in December 2015. PPF (who had originally
of towers in the Czech Republic have multiple Republic, not all or most assets (towers, backbone bought O2 from Telefonica) is now the sole owner of
users. and last mile fibre) are held by one company, the company.
CETIN or other. We believe that investment in both
When it comes to additional partners accessing backbone and FTTC is a natural direction of such TowerXchange: Please sum up your impressions
our networks, yes there are more operators a company as CETIN, being active in both these of the CETIN carve out - and should other
and we want to attract more of them to use our infrastructure markets. European countries and MNOs consider
infrastructure. Generally speaking we continue following O2’s lead to carve out a infraco?
to offer and further develop fair, reasonable and We do offer both last mile wholesale access as
transparent conditions for tower access. well as fibre optic backhaul on a transparent and Petr Slováček, CEO, CETIN: It was a great and
non-discriminatory basis to all interested parties unique step for us, as it enables better business
TowerXchange: Are there other independent and we are convinced this is the most efficient and and investment planning for both the telco and
infrastructure providers in the Czech Republic? effective way to bring high quality services to the the infrastructure company. We do not necessarily
end customer. We believe that the investments advise other operators abroad to follow our
Petr Slováček, CEO, CETIN: Nearly all other to be made will only help the end users in this example, as every market is slightly different and
towers are owned by respective MNOs or by respect. such a fundamental decision must be taken in
broadcaster, České Radiokomunikace, which light of an individual company’s strategy, national
operates in particular a DVB-T networks. The state In terms of towers, there is significant reuse of regulatory framework and economic situation, but
has some of its own infrastructure, for instance these assets for other forms of last mile radio it was a good solution for the Czech Republic. We
for the operation of Tetra integrated emergency access in the enterprise market, e.g. via high can see even now (some few months after the actual
communication systems, but this is of relatively capacity microwaves to locations which are difficult spin-off in June 2015) that both the market as well as
small scale in comparison to commercial networks. or costly to reach with fibre. the regulatory bodies do acknowledge the positive
CETIN is the only company focusing exclusively effects of the separation and we are confident that
on telecommunication infrastructure with the TowerXchange: CETIN listed on the Prague Stock this approach will only grow/expand

Russia and CIS FAQs
Russian telecoms infrastructure
How many towers are there currently in Russia?

Over 40 questions and answers to help you understand the tremendous TowerXchange estimates that there are around
30-35,000 macro tower structures in Russia (i.e. not
opportunities within the Russian tower market
including rooftops and street poles). Our sources
indicate that Megafon has the most extensive network
As the largest country on the planet, Russian passive infrastructure with around 10,000 towers, Vimpelcom and MTS
is made up of 30-35,000 towers and 60-80,000 rooftops across its own around 8-9,000 towers each, Tele2 owns about
populated regions, most of which remain operator-captive. In a 2,000, Russian Towers a further 1,000+, and a handful
fiercely competitive MNO landcape with little experience of colocation, of smaller towercos including Link Development
a couple of small towercos are steadily creating an independent account for a few hundred more.
towerco market in the country. For the last five years there have been
rumours of towerco JVs, SLBs and BTS opportunities in the country, How many rooftop and streetpole masts are there
and most recently the entry of Tele2 offered a unique opportunity to in Russia?
attract tenants, activity in the market was frozen for a long time by TowerXchange estimates there are around 60,000-
political and economic upheaval, although recent reports indicate that 80,000 urban mast solutions in Russia, mostly
not one, but two portfolios of towers may be coming to market very rooftops and streetpoles. However this number is
By Frances Rose, Head of EMEA, soon. As the players line up for a deal, what’s really going on in the hard to pinpoint as asset registers and contractual
TowerXchange
Russian market? documentation is often incomplete as far as these
assets are concerned.
Keywords: Editorial, MNOs, Towercos, Russia & CIS, Europe, Russia, Ukraine, Kazakhstan, Russian
Towers, ESN, Tele2, Megafon, Vimpelcom, MTS, Acquisition, Market Overview, Valuation, 4G, LTE, Deal What is the current situation for urban masts?
Structure, Transfer Assets, Urban vs Rural Co-locations, Infrastructure Sharing, Risk, Build-to-Suit, A lot of the urban capacity in Russia is currently
First Mover Advantage, Country Risk, Rooftop, Sale & Leaseback, Private Equity, Infrastructure Funds provided by rooftop and pole solutions. MNOs find
it easier to secure licensing for streetpoles and
are subsequently more inclined to put points of
service on existing high buildings. However there
Read this article to learn: is no standard for agreements on rooftop space and
< Which Russian MNOs have an interest in an independent tower industry dealing with multiple private landlords across urban
< What the current towerco landscape in Russia looks like areas is a logistical nightmare for operators. There
< How the Russian wireless market has developed and where growth is needed are also a lot of question marks over the legality of
< Sources of potential funding in the Russian market new and existing rooftop masts and the permitting
< Challenges and opportunities in the wider CIS situation is not always clear. Although rooftops and
streetpoles would probably not be included in a

potential tower divestment, TowerXchange believes for which they would receive rent paid in unstable and minimise opex. All operators are under pressure
there may be room in the market for a standardised roubles – and this brings down the potential purchase from the government to provide service to rural areas
and legal solution provider for Russian rooftop points price irrespective of currency. and 4G licenses require that Russia’s MNOs cover all
of service. areas with a population of 10,000+. Leveraging the
How does the fiercely competitive Russian telecom Rostelecom network then delivering the ‘last mile’
How extensive is current LTE coverage? market affect the potential for tower transactions? helps them to do this.
LTE is currently available in 30-50% of Russian In general we find that the Russian MNOs have a
regions, mainly in Moscow, St Petersburg and the relatively conservative and defensive attitude to The current status of tower sharing in Russia
larger cities. selling towers – coming round to the idea of sharing
passive infrastructure is a big psychological step. How has the Russian tower market evolved?
Politics, economy and business environment For those organisations with roots in both Europe As mobile penetration has exploded in Russia over
and Russia, this seems to mean that there are strong the last ten years, the three major MNOs engaged
How has the recent decline of the rouble affected forces pulling in both directions, with the European- in something of an ‘arms race’ in order to gain
the Russian telecoms market? thinking parts of the business pushing to monetise competitive advantage through better network
On one hand the unstable currency and resulting passive infrastructure and the more Russian elements coverage. However MNOs are now being more
economic turbulence is causing operators to resisting this strenuously. A high staff turnover in cautious about this kind of capital expenditure and
reassess their capital expenditure, but on the other many large Russian organisations is also inhibitive over the last couple of years Russia’s operators have
hand devaluation of the rouble is a disincentive to change as there is little continuity of strategic started to focus on bilateral swaps and leasing space
for divestiture of passive infrastructure assets as thinking and process. where possible, and only built new infrastructure
MNOs won’t want to sell if they can’t get full value. where there was a clear revenue stream. A large
Russian tenants would pay their bills in roubles The market in Russia and the CIS MNO in Russia told us they currently spend around
and although raw materials and rent for towers US$1bn per annum (a figure quoted before the rouble
are bought in roubles, and Russia has plenty of What is the most important market in Russia? crashed) on their network to develop coverage and
domestic energy resources, technology tends to be Moscow is the biggest market in Russia, with by far capacity.
bought from overseas and is thus effectively building the greatest population density and the highest ARPU,
and maintaining towers becomea more and more however there are still significant coverage gaps Where is tower growth needed in Russia?
expensive as a function of devaluation. in the area and MNOs are keen to add capacity to The main priorities for operators in the short term is
improve their quality of service to Muscovites. the LTE roll out and infill in Moscow.
There is some discussion currently as to whether
a tower divestment would be conducted in roubles Which regions are the hardest for Russian In sparsely populated parts of Russia offering
or dollars; a rouble price would allow the operator operators to cover? network coverage is commercially unattractive,
to reduce tower opex, however the amount raised Due to a much lower ARPU and population density however MNOs are able to use Rostelecom’s fixed-
would be less significant for the overall balance than the rest of the country, the far east is the hardest line infrastructure and focus on providing the ‘last
sheet. For the interested towercos, however, it seems area to cover and sustain operationally and MNOs mile’ of network connection in order to fulfil license
increasingly unpalatable to pay for an asset in dollars are much more open to sharing in this area to try obligations.

What does sharing look like now? What is the current state of the passive the current currency devaluation and political
Currently tower sharing does take place to a limited infrastructure and asset registers in Russia? issues. However, there is a shallow pool of foreign
extent in the form of bilateral swaps. Tele2 is Reports on this vary wildly, but TowerXchange investors with experience of investing in Russian
generally excluded from this, particularly in Moscow estimates that the majority of asset registers are not infrastructure and with an appetite for more. In
where the most value is to be found, as they are complete and there remains a significant amount of Russia, unlike in many emerging markets, there is no
unable to offer attractive tower locations to the most work to be done before a Russian tower sale process shortage of home grown investors.
established MNOs. could take place. The infrastructure is functioning
but paperwork is not in good order. It is rumoured Who is investing in the Russian tower market
What is the current tenancy ratio and how many that some of Russia’s MNOs have begun to work on right now?
towers are shared? tidying up their asset registers over the last couple Known investors in the market include: UFG,
TowerXchange sources suggest that less than 30% of years, possibly with a sale in mind, but generally Macquarie, IFC, Eurasian Development Bank (EDB),
of towers are currently shared, typically through it seems that Russian telecoms infrastructure is EBRD, ADM Capital and Sumitomo
bilateral swaps and some through existing towercos blighted by poor maintenance, poor record keeping,
such as market leaders Russian Towers. Existing complex legislation and unclear information about The towercos competing for the Russian market
tenancy ratios on independent towers are thought to land ownership.
be no higher than 1.2. Who are the most likely potential buyers if a
Incomplete asset registers could slow any sale significant tower sale were to take place in Russia?
How ready are Russian MNOs for tower sharing? process, but at the same time the time lag could The Russian market is led by Russian Towers,
All of the top four operators use Russian Towers’ exacerbate the value of first mover advantage if it who already own around 1,500 built towers in the
infrastructure to a certain extent so there is a level of takes competitors many months to clean up asset country and work with all four of the country’s
appreciation of shared towers in the market, however registers and bring their towers to market. operators already. There has been interest to date
some network planners are more open to pursuing from Russian infrastructure provider ESN, although
this than others and there is a big difference between Financing a Russian tower deal their commitment to the tower market is currently in
a small strategic colocation and sweeping changes doubt.
to the way towers are managed. Given Vimpelcom’s Is there sufficient capital available for a Russian
success in divesting the Wind portfolio in Italy, it towerco to raise the up to US$1bn needed to make There has been interest from other parties, and
seems Russian MNOs are taking a fresh look at the a significant acquisition, should the opportunity in the Russian market there is always room for
towerco model. Vimplecom have recently engaged arise? surprises, however it is generally felt that building
Merrill Lynch to run their process and MegaFon Experts believe that in general, even given the the right level of tower experience and Russian
are currently spinning out their towers into a current economic situation in Russia, that raising the market expertise is not something which can be done
separate entity - a move largely seen as a precursor necessary capital will not be a problem. However, overnight. In terms of other market players, at least
to divestiture. As yet ele2 and MTS have not yet the source of the investment and the structure of one of Russia’s tower build and O&M contractors
indicated their readiness to divest but both currently the investment may vary depending on the political has sought international partners and finance and
work with Russian Towers and are open to increasing climate. Foreign investors are more prudent and may be interested in entering the space, perhaps
their network by leverging independent towers. there are few actively investing in Russia given focusing on build to suit, and Russian towerco Link

Development operates around 250 towers currently. and the IFC, Russian Towers is the leading and only BTS programmes and partnerships with other
It remains to be seen whether any new market institutionally backed towerco in Russia. Russian infrastructure providers. They see themselves as able
entrants can raise the financial backing needed to Towers’ current portfolio of around 1,500 towers to acquire a substantial portfolio if an opportunity
build or acquire a large chunk of infrastructure. has grown organically through Build to Suit and came to market, but in the meantime they have a
relationships with key partners including Russian focus on organic growth with guaranteed returns.
It’s worth noting that Russian operators also use Railways, to deliver tower access in low coverage As far as TowerXchange can tell, ESN are focussing
infrastructure owned by RTRS (part of the state- areas. Russian Towers are under pressure to secure solely on a big deal and will enter the tower market
owned Russian Television Broadcasting organisation) a Russian tower deal if and when it happens and only if they are able to acquire a large portfolio.
to boost their network, although to our knowledge TowerXchange speculates that they might be more
this network of around 16,000 broadcast towers is not open to a JV or partnership with Russian MNOs than How likely are we to see a big international
run as a commercial towerco. their competitors ESN. towerco come into Russia?
There have been rumours of international towercos
What’s clear is that whoever manages to persuade a Who are ESN? or consortia entering the Russian market on a
Russian MNO to part with their towers will instantly ESN is one of the largest private companies in Russia. management agreement with limited scope in order
lead the market and will become the most likely Established in 1991 by Grigori Briozkin, they began in to mitigate country risk then taking more control
counterparty for any subsequent deals which may oil and gas and were then able to diversity into new at a later stage. However this was before the events
be done. This means that despite a long and so far areas such as energy, engineering and media with of 2013 and TowerXchange believes that there is
fruitless process, Russian towercos cannot afford to a current interest in high tech and start ups. For an currently minimal interest from the big established
take their eye off the ball for a second in case they ambitious and bullish company like ESN, acquiring towercos to enter the Russian market.
lose ground, and therefore the whole market, to a a portfolio of towers in Russia could be a way into
competitor. CEE and even Europe as a whole. Given ESN’s proven A Russian tower deal: How will it happen and
ability across multiple industries and track record what will it look like?
What does a towerco have to do to appeal in this in maintaining infrastructure across a country the
market? size of Russia, it’s likely that if they were to bid they How will existing market dynamics affect the
Ideally a towerco needs to attract a solid management would have a strong preference towards an outright tower market?
team with extensive experience in comparably acquisition of a tower portfolio over a collaborative Given the fierce competition between the three
challenging markets, strong financial backing and partnership with any of the Russian operators. incumbent operators in Russia (Megafon, MTS and
the experience in Russia to navigate any political and However ESN’s lack of existing specialism in this field Vimpelcom) there is a pervading fear of losing
administrative difficulties which might arise. and flexibility in the market means their interest in market share, particularly now that the Tele2/
the tower market may not remain top of their agenda Rostelecom merger has created a highly credible
Who are Russian Towers? indefinitely. competitor with significant political clout and an
Russian Towers was established in 2009 by both appetite to rapidly expand their network. If one of
Russian and Western professionals with substantial How ambitious are Russian towercos in terms of the incumbent MNOs were to divest their towers, it
telco experience in Russia. Backed by both Russian growth? has been suggested that they may choose to retain
and international investors, including Macquarie To date Russian Towers has built portfolio through right of veto for potential tenants. The feasibility of

“
this choice and the resulting impact on the value How will a substantial divestment affect the
of a tower portfolio would undoubtedly throw into market?
question the ability of the tower industry to develop Tele2’s need for coverage creates a ‘first mover
in the country. advantage’ for whoever is first to divest their towers,
particularly if their deal is structured in a way to
Who will trigger a change in the Russian market? allow Tele2 to significantly improve their network.
Vimpelcom have the potential to set the pace if they Given Tele2’s clear need for However, because the market includes some bilateral
choose to divest their towers following a successful swaps and network coverage is not equal across
network growth the tenancy
divestiture of Wind’s towers in Italy. Vimpelcom all operators, there will be continued and proven
achieved a 16x valuation in Italy, which is sure to ratio in Russia could achieve opportunity for at least one subsequent tower deal.
have boosted their case to consider further tower As TowerXchange has noted in other markets though,
a healthy annual growth
sales.
Tele2 will also have a strong influence on the market

as potential tenants for a new Russian portfolio. In
rate near 0.2, and eventually
exceed two
“ if the ‘first mover advantage’ isn’t clear cut, the ‘last
mover disadvantage’ still holds true and whoever
doesn’t divest will be left with stranded assets on
their balance sheet being devalued as first and
the mean time Tele2 will be focussing on build to suit second movers’ towers are leased up.
towers in order to meet coverage targets following
their merger with Rostelecom. TowerXchange has What is the potential tenancy ratio in Russia for a
reason to believe that they may be interested in a buy divested tower portfolio?
and lease back deal at some point in the future if they Their recent appointment of Merrill Lynch to oversee Given Tele2’s clear need for network growth the
are happy with their towerco partner. Given Tele2’s the process is a strong indicator that their towers tenancy ratio in Russia could achieve a healthy
European background, they may be more open to will come to market this time and MegaFon’s move annual growth rate near 0.2, and eventually exceed
tower sharing as a way to cut costs and increase to bring their towers to market may well be the two, although would be unlikely to go beyond three.
operational figures. incentive they need to be first movers and realise the We would expect a substantial difference, in the
best price for their assets. order of 0.5 or greater, between the potential tenancy
What drives Vimpelcom being the most likely to ratios in major urban cities compared to smaller
divest? How good would Tele2 be as tenants for the towns exceeding 10,000 population.
A need to restructure debt from their merger Vimpelcom towers?
with Orascom, with Vimpelcom’s balance sheet Tele2 would be drive demand for tenancies for any What would a deal structure look like?
believed to be US$25bn in the red. Executives with substantial Russian towerco, but would not take on Given the Russian reticence to lose control of their
experience of tower M&A at Vimpelcom’s European tenancies on the towers wholesale – they would pick networks, it is likely that we will see a deal structured
HQ led the recent Wind process in Italy. With the and choose according to when the towers became as a joint venture, or with the MNO retaining a stake
excellent valuation realised in that tower transaction, available, their locations and local competition. in the tower portfolio, or indeed structured as a
Vimpelcom may have appetite for further tower Nonetheless, Tele2’s appetite to rollout represents a ‘Manage with License to Lease’ deal rather than an
sales, and we believe that Russia is next on the list. potential near-term spike in tenancy ratio growth. outright sale and lease back. TowerXchange believes

that, although the Russian towercos would prefer
a straightforward sale, the pressure to secure a
The Ukrainian tower market
deal and effectively take control of the market
will probably drive them to compromise when the
opportunity arises. How has the Ukrainian telecom market been to roll out 2015-17 if the spectrum auction is
affected by recent events? realised and there is a need for rural network
How long would a potential Russian transaction The Ukrainian telecom market has been heavily extensions. If the political situation calms down
take once someone decides to divest? affected by the unrest in the country and our there could be a good market but that seems
Much depends on the state of asset registers. If
sources confirm most companies in the country unlikely in the next one to two years.
asset registers are quietly being tidied up, then an
are adoping a ‘wait and see’ attitude with no
advisory firm could be appointed and a process
plans for asset divestment or significant strategic What is the size of the Ukrainian telecom
commenced relatively swiftly. However, if asset
change in the near future. However given tower market?
registers require substantial work, there could be a
12 month lag before a process even commences.
Ukraine’s ties to the European market it may well There are approximately 11,000 towers in
be easier for Western firms to invest once the Ukraine in total, Kievstar owns around 5,500,
The devaluation of the Rouble has likely moved the region settles down and we may see the telecom MTS 4,500, Life 1,000 and then there are
potential for a tower transaction in Russia from a industry bouncing back quite quickly. UKRtower’s 400. There is an estimated need for
near-term to a mid-term opportunity. another 1,000 or so towers in the market just for
How ready is Ukraine for an independent full 2G coverage.
What time pressures are there to bring towers to tower market?
market sooner rather than later? There is one small towerco in the country – How are the tower markets in the CIS region
By worring about conceding market share to Turkish owned UKRtower – who are focussed seen in relation to Russia?
Tele2, Russia’s incumbent MNOs risk losing value on organic growth and have around 400 towers Investors and MNOs tend to cluster together the
in their towers as Tele2 (most likely tenants)
and deep partnerships with two of the major CIS as the region consists of a small number of
acquire alternative solutions to fulfil their RF
operators in the region. The market accepts countries and could fold into a pan-Russia & CIS
planning needs. Tele2 are pouring millions into
towersharing as a concept but a large scale tower initiative. There is also a significant cross-over
a capex programme meaning that their value as
divestment is unlikely at this stage. Very limited of key MNOs across several markets. However
potential tenants is likely to decrease in the near
growth is expected next year due to the political CIS countries do have their own challenges and
future. However it’s been at least five years since
rumours started to come out of Russia about a situation. several have a unique tower market structure
potential tower deal – a process has even been – for example in Kazakhstan the incumbent
started and stopped within that timeframe – so most What is the potential for a Ukrainian tower national operator owns the vast majority of
commentators see this dragging on for another market? towers, which they are required to share at a
three or more years, especially given the current Good sized population of five million. 3G is due remarkably low lease rate
economic and political situation

TowerXchange’s analysis of
How many towers are there in Ireland?
There are currently 4,000 towers in the Irish
the Irish tower market market, of which 60% sit in the hands of the three
incumbent MNOs - Vodafone, Meteor (owned by
An insight into one of Europe’s most fragmented tower markets Eir, previously known as Eircom) and 3 (Hutchison)
who have just recently acquired O2 (Telefónica).
The remaining 40% of towers are owned and
With a population of 4.78mn and 4.9mn mobile connections, 60% of Ireland’s
operated by a number of towercos, broadcasters
4,000 telecom towers sit in the hands of the country’s three MNOs leaving
and state enterprises.
the remaining 40% in the hands of independent tower companies, broadcast
operators and public sector players. With no one dominant tower company, the
Who are Ireland’s MNOs and what scale are their
market is ripe for consolidation as ambitious towercos look to get a foothold in
networks?
the region. December’s announcement of the National Broadband Plan, coupled
By Laura Dinnewell, with the consolidation from four to three MNOs following 3’s acquisition of O2,
Head of EMEA, TowerXchange The history of MNOs in Ireland is complicated by a
creates new opportunities and challenges for towercos in the market.
number of mergers and acquisitions and network
sharing agreements. Eircell, 100% owned by Eircom
Keywords: 2RN, 3, Britannia, Build-to-suit, Business Case, Business Model, Carve Out, Cellcom, CIE, was the first MNO in the Irish market. In 2001
Cignal, Co-locations, Coillte, Deal Structure, Decommissioning, Densification, Editorial, Eir, Eircom, Eircell was bought by Vodafone, demerging from
ESB Telecoms, Europe, Europe Insights, Europe Research, FIM, Hibernian, Highpoint, Hutchison, Eircom. Vodafone currently has the largest market
Infrastructure Funds, Infrastructure Sharing, Insights, Installation, Investment, Investors, Ireland, share in Ireland sitting at 38% with 99% network
Market Entry, Market Forecasts, Market Overview, Masts & Towers, Network Rollout, O2, Obelisk, OPW, coverage.
Regulation, RTE, Sale & Leaseback, Telefonica, Tenancy Ratios, Tender, Three, Tower Count, Towercom,
TowerCos, TowerXchange Research, Transfer Assets, Urban vs Rural, Valuation, Vodafone, Who’s Who, The second MNO to launch in the Irish market was
WIG, Wireless Infrastructure Group Digifone, owned by Irish billionaire Denis O’Brien.
Digifone was rebranded O2 in 2001 following a take
over and then demerger from BT, and was then
Read this article to learn: owned by Telefónica following their takeover of O2
< Who the key players are in the Irish tower market Ireland’s parent company in 2006 (until their recent
< How MNO consolidation has affected tower industry dynamics acquisition by 3).
< What potential exists for tower transactions in the future
< What opportunities are presented by new build and decommissioning Meteor Mobile, at the time owned by US company
< How factors such as the entry of ground lease aggregators and the rollout of the National Broadband Western Wireless, launched in Ireland in 2001
plan will affect the market as the third MNO in the market and then was
subsequently acquired by Eircom in 2005, still

Figure One: Irish operator mobile market share from 40 to 113 towers (see table two). In addition,
state owned broadcaster 2RN (RTE) owns 150
towers, the Office of Public Works 180 and CIE, the
8% Irish national railway company, 100. See sidebar
one for information on each company.
19% How has MNO consolidation impacted towercos

38% Vodafone
in the market?
3 (Hutchison) + O2 (Telefonica)
Meteor (Eir) Towercos have been affected to varying degrees by
Others (primarily MVNOs Tesco Mobile the acquisition of O2 by 3. Towercom, whose towers
& Lyca Mobile) had a predominance of Vodafone tenancies have
felt the impact less than others. Those that had a
high concentration of O2, 3 and Meteor have most
35% acutely felt the impact of consolidation as, due to
the network sharing agreement between O2 and
Meteor, the three networks are now effectively one.
In order to mitigate the loss of tenancies, some
operating under the brand Meteor. Meteor since been restructured - Netshare is now wholly towercos are looking at the added value they can
currently have 21% of the market share in Ireland owned by Vodafone. Prior to O2’s acquisition by bring to their towers to position them as core assets
with 75% network coverage and is the only Irish 3, O2 created a network sharing agreement with for the MNOs - one of the primary mechanisms
owned MNO in the market. Meteor - the EU has ruled however that following being the deployment of fibre to sites.
O2’s acquisition the network sharing agreement
3 (Hutchison) was the latest MNO to launch in the must remain - thus tying together the O2, 3 and What tower transactions of scale have occurred
Irish market in 2005 and up until 2014, held only 9% Meteor networks. in the Irish market?
of the market. Following an acquisition of number
two operator, O2 from Telefónica in 2014 for Who are Ireland’s independent tower In August of 2015, Coillte, the state forestry agency,
€780mn, the newly formed entity currently controls companies? sold a total of 113 masts and 400 plots of land (on
33% of the market with over 95% network coverage. which Coillte masts and those of third parties -
40% of towers in the Irish market are outside the predominantly MNOs sat) to French investment
The consolidation from four to three MNOs hands of MNOs, higher than the 27% average in fund InfraVia Capital Partners. Following the deal
(following 3’s acquisition of O2) has been further Europe. The biggest towerco players are Towercom a new entity, Cignal, was created to manage the
complicated by network sharing ventures set up and ESB Telecoms each with around 400 towers, sites on InfraVia’s behalf. Whist details of the deal
by each of the operators. Vodafone and 3 formed a joined by six further tower companies which value have not been released by any of the involved
network sharing venture called Netshare which has TowerXchange are tracking, with portfolios ranging parties, rumours indicate this was in the order of

Figure Three: Who owns Ireland’s 4,000 towers? its exchange portfolio (including some very valuable
Source: TowerXchange urban locations). Potentially once they’ve run out of
377 unused properties some commentators believe they
180 3 + O2 (Hutchison) could look to sell their 525 towers.
400 150 Vodafone
113* Meteor (Eir) Could we see M&A amongst Ireland’s towercos?
100 Towercom
100 As a highly fragmented market, there exists strong
500 ESB Telecoms
70 potential for consolidation between Irish towercos.
50 Office of Public Works
40
Whilst 2015 saw one transaction of note, no further
2RN (RTE) transactions are currently expected in 2016,
Cignal* although the more acquisitive towercos are keen to
CIE engage in dialogue on the subject.
Wireless Infrastructure Group
800 1,100 Hibernian (Britannia) Insiders believe that a sale from a state or semi-
Highpoint (Obelisk) state entity could be more likely. An ESB Telecoms
Cellcom tower sale had been considered a few years ago as a
means to help reduce state debt, however with ESB
now being in a much better financial position and
*113 owned towers with additional ground lease income on 400 plots of land on which Cignal and 3rd party towers sit
with strong management in place, a tower sale in
the near future seems unlikely. There has been talk
€70mn. Prior to that Towercom bought 340 masts watching O2 closely with the belief that their
that OPW could look to sell some of their towers and
from Eircom for €155mn in 2007. financial pressures may necessitate the sale of
some observers believe there is a potential for a sale
towers to raise capital. The recent carve out of
Could we see Ireland’s three MNOs divesting 11,500 Telefónica towers in Spain and speculation Figure Two: Irish MNO installation
towers? surrounding divestment of further assets has and tower counts
brought credibility to this theory, however since
Despite the sale of 340 masts from a cash-strapped
MNO Number of Number of
the acquisition by 3 we are unlikely to see a sale in
installations towers
Eircom to Towercom back in 2007, MNOs have not the near future. Similarly, Vodafone, who have yet
to date expressed an interest in the sale of their to monetise many of their towers globally, do not Vodafone 2400 800
towers. Whilst tower companies have approached look set to be bucking this trend in Ireland. So no 3 + O2 (Hutchison) 3600 1100
the incumbent MNOs with sale and lease-back divestiture is currently expected from their Irish
Meteor (Eir) 1800 500
proposals, the well capitalised operators have not yet operations.
been motivated to sell. *3 had 50% network coverage prior to merger with O2 which
had 95%. There are also two key MVNOs in Ireland- Tesco Mobile
There have been no rumours of any further tower and Lyca Mobile which account for the remainder of the mobile
Prior to the takeover of O2 by 3, observers were divestments by Meteor, although Eir is now selling market share

Snapshots of Ireland’s tower operators
Towercom Formed in 2007 following the and radio company currently owning 150 broadcast currently own around 100 towers in the Irish
acquisition of 400 masts from Eircom, Towercom masts. They haven’t proactively sold space to MNOs market having acquired FIM’s portfolio of 42
was one of the first independent tower companies but there has been a high uptake by operators for towers.
in Ireland. In 2013 the company was acquired by tenancies on their masts.
the Irish Infrastructure Fund (managed by AMP Hibernian Towers Hibernian towers formed ten
Capital). Cignal Cignal, is Ireland’s newest towerco, which years ago and have since acquired the majority of
was established in 2015 following InfraVia Capital their portfolio from MNOs and smaller towercos
ESB Telecoms ESB Telecoms is a fully owned Partners’ acquisition of 113 towers and 400 plots of (with some degree of new build). In addition
subsidiary of the state owned power company – land (on which towers are situated) from Coillte, the to their 70 towers in Ireland they also have a
the Electricity Supply Board of Ireland. Formed in state owned forestry company. similarly sized portfolio in the UK under the name
the 1970s to meet ESB’s own telecommunication Britannia.
requirements, ESB Telecoms entered commercial CIE CIE is the Irish railway company and currently
operation in the 1990s, leasing space to operators owns 100 masts on which around 35 have MNOs Highpoint Highpoint, owned by Obelisk group,
on their towers. They currently own 377 towers as tenants. There is however a drive to get away currently manages a portfolio of 150 sites, of which
and have also launched a fibre business. from these sites as licensing arrangements are very 50 are Highpoint owned. The majority of their
complicated. towers are based around the borders and the West
Office of Public Works The Office of Public Coast, having stayed away from the East Coast.
Works is a public service organisation tasked Wireless Infrastructure Group Wireless
with managing the country’s estate portfolio. Infrastructure Group, launched over eight years Cellcom Cellcom, with a portfolio of 40 towers,
They currently own and operate 180 towers. ago and have 2,000 towers across three European based mainly around the West Coast are privately
markets (UK, Netherlands and Ireland) and a owned. Their towers have a high tenancy ratio,
2RN (RTE) RTE is the national communication fast growing DAS and small cells business. They thought to be upwards of two
at 2RN with its assets having been carved out from operators instead using existing assets and rights What is the level of decommissioning?
parent company, RTE, however, to date there have on rooftops. The last major batch of towers to be
been no qualified rumours of such a transaction developed was as part of the National Broadband Following the acquisition of O2 by 3, a
occurring. Scheme, led by 3 (which Cignal’s towers played a requirement for decommissioning of existing
major role in). sites has been created. The lengthy regulatory
What level of new build is happening in Ireland? process surrounding the acquisition had stalled
Whilst rumours surrounding rollout are limited, decommissioning but a program over the next two
Following the amount of MNO consolidation that we have heard talk that Vodafone are approaching to three years has commenced and represents a key
has occurred in the market, MNOs are currently towercos in the market regarding a build to suit focus for some towercos. There are mixed opinions
very closed regarding future rollout plans and most programme but discussions are very much in the when it comes to the volume of decommissioning in
believe appetite to be limited in the market with early stages. the market however there is a growing sentiment

that the level of decommissioning required will Whilst there are a few not-spots in rural areas,
be lower than people originally thought and the issues are very much localised. After a deep
that potentially there may be a risk of “over- recession some of the MNOs took their foot off
decommissioning” as MNOs look to focus on short the pedal in addressing these not-spots but they
Meetup
term stock market performance over longer term are now working on infill for some very specific
network planning. locations. Due to the fragmented and very localised
nature of this infill, it does not constitute a major
What role have ground lease aggregators played
in the market to date and how exposed are each
opportunity for towercos.
Europe 2016
of the towercos? What is the National Broadband Plan and what
implication does this have on Irish towercos? 12-13 April, Business Design
The exposure of Ireland’s towercos to the actions
of ground lease aggregators varies company In December, a new National Broadband Plan was
Centre, London
to company. State or semi-state towercos are announced for Ireland to build upon the work of
relatively safe - 2RN owns the land under most of the National Broadband Scheme initiated in 2006.
its portfolio, ESB Telecoms own all of their own The original scheme, awarded to 3 Ireland, was to
sites and OPW are in the same position. Other provide a minimum of 1.2MB of download speed to
companies not at risk from the interference of rural areas; the aim of the new National Broadband
ground lease aggregators are Cignal (who are end Plan is to bring this up to a minimum of 30MB.
owners of the land) and Towercom (who have full The state have done a lot of mapping and there are
rights to all of their sites). Cellcom have long leases approximately 750,000 premises in the catchment
but are exposed somewhat, whilst the majority of area to be covered by the plan.
Hibernian, Highpoint and WIG’s sites are leased.
Companies were invited to enter the pre-
Ground lease aggregators who have been looking qualification process just before Christmas and
at the market include AP Wireless, but to date they responses need to be in before the end of February,
have reportedly not been getting a huge amount of after which a formal tender process will be opened.
traction. The problem in the market is not finding Details need to be extrapolated within the plan,
the product, rather it’s finding a party to offload however thinking is that the delivery will follow
it to. Towercos are not mature enough and the both a fibre and a wireless strategy, potentially
financial institutions won’t pay a large enough creating requirements for new tower build (as was
A unique networking opportunity with 200 leaders of the
multiple. the case with Coillte’s towers in the original scheme) European telecom and broadcast tower industry
and also the bringing of fibre to towers (which is
Is there a focus from the MNOs on improving something that is currently being planned by some www.towerxchange.com/meetups/meetup-europe
rural coverage? towercos in the country)

European mobile in flux
A wave of consolidation is taking place across
Europe. In Britain, BT plans to take over EE while
O2 is in the process of selling its network to Three.
How Europe’s network landscape is about to undergo a new wave of change In France, Altice’s subsidiary, Numericable-SRF, is
acquiring Bouygues, while in Norway, Telia plans to
The European mobile telecommunications market has acquire Tele2. These consolidations are primarily as
been undergoing continuous change for some years, but a result of the pressures that mobile operators are
more recently, seismic shifts have been taking place. The facing due to declining revenues and margins. Voice
industry continues to face pressing economic challenges, revenues have been declining much faster than
which have been forcing mobile operators to reduce data revenues have been rising, creating intensive
operating costs and capital expenditure. After a surge pressure on mobile operators’ finances.
in operator-operator deals on sharing infrastructure,
consolidation and tower portfolio sell-offs to independent To put this into perspective, the Financial Times[1]
third parties appear to be becoming more prevalent. reports that European mobile revenues decreased
Technological developments promise to help further in by 18% between 2008 and 2014, whilst the return
doing more with less. However, this may not be enough on capital employed halved in the same period to
and, as a result, operators need to explore more innovative around 10.9% (post tax). Further, the European
By Andrew Doyle and Michel Grech, PA Consulting Group options for making network spending more efficient. Commission is pushing for a single market in digital
communications in order to encourage economic
growth and increased employment. As a result, an
Keywords: 3G, 4G, Active Infrasharing, Altice, Arqiva, Bougues Telecom, Business Case, Capex, Carve Out, overhaul of EU telecoms rules is expected, with EU-
Cellnex, CTIL, Deal Structure, Decommissioning, EE, Europe, France, Germany, Hutchison, Infrastructure wide criteria for spectrum allocation at a national
Sharing, Italy, KPN, Lawyers & Advisors, Market Overview, MBNL, Numericable SRF, O2, Operator-Led JV, level and incentives for high-speed broadband.
PA Consulting, RAN Sharing, Sale & Leaseback, Small Cells, Spain, Strategic Consultancy, Tele2, Telefonica, The aim will be to ensure a level playing field for
Telia, The Netherlands, Third Party Research, Three, UK, United Kingdom, Valuation, Vodafone all existing as well as new players in the telecoms
market. Whilst it is too early to speculate on the
implications for existing operators, the changes are
likely to result in the need for more investments by
operators.
< The drivers and implications of MNO consolidation
< European MNO balance sheets under pressure
The introduction of higher-speed networks,
< Alternate models of infrastructure sharing: examples from across Europe cheaper smartphones and a thriving ecosystem of
< Opportunities for towercos to move beyond passive infrastructure to running other shared infrastructure applications have resulted in a significant increase
< The separation of ‘NetCo’ from ‘ServiceCo’ in mobile data usage. Ericsson[2] estimates that, by
the end of 2015, more than half of Europe’s mobile

subscribers will be smartphone users and that, Table 1 Active Infrastructure Sharing via MORAN (Dedicated spectrum)
by 2019, the total number of smartphones will in Europe
exceed the total population. Mobile broadband
data has been increasing at annual rates of
Country Operators Date
40%–50% driven by new services such as new
video applications and connected devices. Cisco Czech Republic O2/T-Mobile 2011
forecasts that Western European mobile monthly
data usage will increase seven fold between 2014 France SFR/Bouygues 2014
and 2019[3]. Whilst this may sound like good news
Greece Vodafone/WIND Hellas 2013
for the mobile operators, the incremental revenue
as a result of the new investments is limited; ABI Poland PTC/Orange 2011
Research reported in 2014 that the price premium
for Long-Term Evolution (LTE) over 3G had declined Romania Vodafone/Orange 2013
to 20% in developed countries and it is likely
to erode completely. The growing gap between Spain Vodafone/Orange 2006
demand and supply is forcing operators to do more
UK EE/Three 2007
with less and while technological step changes
such as Network Function Virtualisation (NVF), UK Vodafone/ O2 2012
Software Defined Networks (SDN), BBU pooling and
multi-operator core networks with shared/pooled and operating costs. The majority of the active operational savings. Operator-operator deals,
operator spectrum (MOCN) provide opportunities infrastructure deals have been set up through a joint typically via joint ventures, have been more
for efficiencies, operators are re-thinking their venture, where typically the two mobile operators prevalent in European markets (see Table 1-3)
approaches to network infrastructure. consolidate the shared assets, including towers and compared to the sale of an operator’s tower portfolio
masts, which are transferred to the joint venture to third parties. More recently however, there have
For many European operators, the access network is or decommissioned over time if deemed surplus to been several instances where operators are selling
no longer seen as the key differentiator as evidenced requirements. European regulators have generally all or part of their tower portfolios to independent
by the number of shared infrastructure deals, been supportive of network sharing although deals third-party companies under a sale-and-lease-
active as well as passive, that have taken place in are generally looked at on a case-by-case basis. The back arrangement. The Dutch incumbent, KPN,
Europe. Differentiation is increasingly seen to come key concerns are typically around ensuring that for example, has been divesting its towers across
through launching innovative bundled data and such deals are not anti-competitive. The Netherlands in a phased approach for some
communications services to end users, integration time. In addition, the last two years have also seen
with unlicensed spectrum, loyalty programmes and Active infrastructure-sharing deals typically provide operators in France, Spain and Italy selling off their
premium content. Infrastructure sharing has been operational savings of 25%–35%, depending on towers or a majority of their shareholding (see
one strategy that operators have been pursuing for several factors. This is higher than for passive Table 4) to independent tower companies. The shift
some time in order to reduce both capital outlay tower-sharing deals, which typically deliver 15%[4] towards the sale of most or all of the tower estate is

Table 2 Active Infrastructure Sharing via MOCN (Shared/pooled partly due to the need to raise capital but also to the
spectrum) in Europe perceived need for trusted third parties to deliver
a cleaner separation of network infrastructure.
Country Operators Date This separation not only helps in addressing anti-
competitive concerns but takes away any inherent
Denmark TeliaSonera/Telenor 2011 tension between competing operators trying to
Finland TeliaSonera/DNA 2014 share the infrastructure. However, joint ventures
and operator-operator agreements are difficult to
Sweden: Telenor/Tele2 2009 unwind once established and can potentially make
consolidation with other operators not involved in
Sweden Telenor/Hutchinson 2001
an agreement difficult or slow. The consolidation
Table 3 Passive Infrastructure sharing amongst MNOs in Europe taking place in the UK is a case in point. Here,
Hutchison’s Three is in the process of acquiring
Country Operators Date Telefonica’s O2 while BT is planning on acquiring
EE. Currently O2 has an active sharing agreement
Germany Vodafone/O2 2009 with Vodafone UK and Three has a joint venture,
MBNL, with active sharing with EE, which has
Ireland Vodafone/Three 2009
already integrated T-Mobile and Orange.
Ireland Three/Eircom 2011
Network and IT expenditure often constitutes 75% of
Italy TIM/Three 2009 capital expenditure and 45% of annual operational
The Netherlands T-Mobile/Tele2 2013 costs and thus the scope for efficiencies in this area
can be significant. With consolidation more likely
Table 4 Towerco deals in Europe amongst European operators, further innovative
ways to make network spending more efficient need
Country Operators Towers Operators Date to emerge. With NFV, it is possible to envisage, for
example, multi-tenanted network elements, not just
Netherlands KPN 744 Protelindo, Shere Group, TDF 2008-12 at the Radio Access Network (RAN) layer but deeper
into the core network. Such sharing could however
Germany KPN 2,000 American Towers 2013
significantly impact service differentiation and
France Bouygues 2,166 Antin Infrastructure Partners 2012 independence among operators and will be subject
to regulatory approvals.
Italy Vimplecom WIND 7,300 Abertis (now Cellnex) 2015
Spain Telefonica/Yoiga Abertis (now Cellnex) 2014 Other developments are on the horizon, such as
4,227
the move towards smaller cell technology with

heterogeneous networks and the deployment of particular NFV, will bring significant benefit in is actually hurting investment and slowing down the
5G. These developments will however impact operational efficiencies as well as reduced capital proliferation of high-capacity end-to-end networks
third-party infrastructure economics as tenancy expenditure. However, this may not be enough – both fixed and wireless. Competitive wholesale
opportunities decrease. As an independent tower and operators may need to consider more radical supply of capacity to nimble retail operators could
company’s business model is generally built around changes. Potential strategies beyond consolidation be the delivery paradigm of the future. For this
tenancy additions, any deal with an operator starts or network sharing include the separation of an to happen, regulators, investors and operators
to look more like an infrastructure outsourcing operator into an ultra-efficient network-focused need to start thinking about their industry afresh
agreement where suppliers have to make their organisation (NetCo), with sole responsibility for as the model developed during the 1980s looks
margin through service efficiencies, which may the network infrastructure, offering wholesale increasingly unsustainable. What operators do with
lead to a lower valuation of the operator’s tower services to a service company (ServiceCo), with their network assets is central to this debate.
portfolio. responsibility for delivering services to end users.
Such separation could allow NetCo to operate Over the next few editions of the TowerXchange
European tower companies are looking at independently of ServiceCo, offering wholesale Journal, PA Consulting will be exploring the state
diversification, Arqiva for example, the UK’s largest services to other service providers and ServiceCo of the European mobile infrastructure market,
independent provider of wireless sites, has recently could potentially outsource all its operations to a reporting on existing joint venture initiatives, the
partnered with SIGFOX to deploy a countrywide third party to achieve economies of scale. ServiceCo impact of consolidation in Europe and assessing the
ultra-low-band network for M2M. Cellnex, the would focus on providing differentiated services by potential strategies operators need to adopt in this
Spanish tower company, is looking to exploit its using wholesale services, not just from NetCo but shifting landscape
recently acquired cellular towers in Spain and Italy also from other wholesale providers, to compete
[1] www.ft.com, Lex in-depth, European Telecoms , 18th Nov 2014
for other digital dividend opportunities as well as with the over-the-top providers. KPN, for example,
[2] Ericsson Mobility Report; 2014, 2015
expand internationally. Could independent tower has already created a NetCo that combines the
[3] Cisco VNI, 2015
companies move from passive infrastructure to operations of its IT and network infrastructure
[4] GSMA, Mobile Infrastructure Sharing, 2012
running shared infrastructure for the operators? covering the mobile, landline and wholesale
With the right strategy and skill set, independent divisions.
tower companies can offer additional value-added About the authors
services to the mobile operators as witnessed by European operators need to continually evaluate
several organisations in Europe already offering potential strategies and find innovative options for Michel Grech and Andrew Doyle work at
managed services for active equipment and making their network spending more efficient in management and technology consultancy, PA
backhaul. order to reverse the trends in revenue and return Consulting Group as part of the Technology
on capital employed. Bold options are needed; for and Innovation practice. There they work
As for European operators, the pace at which returns example, if the network is no longer a source of closely with network operators and blue chip
on infrastructure investment have decreased over differentiation, does a retail telecommunications enterprises, advising them on the implications of
the last few years, with no sign of change, means operator actually need its own dedicated network? legislative and technological shifts and helping
that there is an urgent need to have a good strategy It could be argued that vertical integration of develop appropriate responses
in place. The new technological step changes, in operators and the duplication of national networks

View from the top: the UK’s TowerXchange: Please share Arqiva’s
background. How was the company formed?
biggest towerco on rural coverage Nicolas Ott, MD Telecoms, Arqiva: Arqiva is a private
company owned by pension and infrastructure
and capacity solutions funds. We have a long history in the UK starting

at the beginning of the 20th century as Arqiva’s
roots go back to the ITA (Independent Television
Arqiva illustrates the synergies between broadcast and telecom towers, and Authority) in the 1950s. It’s been going through a
highlights value added services long journey in TV infrastructure whilst developing
the mobile tower business step by step. The ITA was
renamed a number of times and as NTL Broadcast
With over 60 years’ history in broadcast infrastructure, Arqiva is
was bought by a Macquarie-led consortium in 2005
one of a uniquely European breed of towerco which has grown
and renamed Arqiva. In 2007 Arqiva acquired
up from a solid history in television broadcasting and now
National Grid Wireless, which was owned by Crown
owns a large chunk of both broadcast and telecommunications
Castle until 2004, and which included within that
infrastructure in their home countries. Nicolas Ott, MD of
business the former BBC terrestrial broadcast
Telecoms at Arqiva, spoke to TowerXchange to explain why he
assets.
thinks the broadcast/telco infrastructure synergy works so well
in Europe, how capacity solutions will be the next big area for
In the UK Arqiva does all the TV broadcasting
Nicolas Ott, MD Telecoms, Arqiva growth, and how he sees the UK tower market developing.
(which is a regulated activity) and it was Arqiva
who made the digital switchover two years ago, we
Keywords: Interview, Towercos, Europe, Arqiva, United Kingdom, England, Scotland, Wales, Northern also do most of the radio broadcasting in the UK
Ireland, O&M, Construction, Market Overview, Investment, 4G, EBITDA, Valuation, Tenancy Ratios, Co- and buy wholesale satellite capacity and resell as a
locations, Infrastructure Sharing, QoS, Build-to-Suit, On-Grid, Procurement, Skilled Workforces, Rooftop, DAS,
service to TV channels all over the world for Turner,
Small Cells, Decommissioning, Infrastructure Funds
Al Jazeera and many big TV groups.
We also have recently formed a strong machine-to-

Read this article to learn: machine division. We won the smart meter tender
< How one of Europe’s oldest towercos has diversified to remain competitive in the current market issued by the UK government, from Manchester
< How broadcast infrastructure can be employed for telecoms coverage and capacity to North of Scotland, making us defacto one of the
< How potential consolidation in the market will affect MNOs’ appetite for further independent biggest players in the UK. We have also invested in
tower access other technologies, for example we have exclusive
< How Arqiva is making capacity solutions work for MNOs and landlords in the UK rights of the SIGFOX technology in the UK for the
first nationwide Internet of Things network.

“
In terms of telecom infrastructure we own roughly
25% market share in UK macro tower sites. We
service all of the four MNOs and have around
8,600 active towers for these mobile operators. Our
tenancy ratio is around 2.5 MNOs per tower on
average. Our total portfolio consists of over 16,500
We service all of the four MNOs and have around 8,600 active towers
towers but they’re not all active either because
the specific locations do not currently form part of
wireless operators’ network rollout plans, are in
rural locations where there is no current demand
or in some cases are sites which are complex and
for these mobile operators. Our tenancy ratio is around 2.5 MNOs per
tower on average. Our total portfolio consists of over 16,500 towers
“
expensive to deploy (such as electricity pylons).
Either way we are the largest independent wireless
infrastructure provider in the UK.
and the US is different again so comparisons are Nicolas Ott, MD Telecoms, Arqiva: It’s a very simple,
We have around 2,200 employees across the whole hard. We offer infrastructure (mobile, broadcast three layer answer: infrastructure, sourcing and
business and most are in the UK – we do have a and satellite) and we also package up services to skills.
handful of staff in the Republic of Ireland, France, broadcasters and MNOs. In order to do this we need
USA and Asia but primarily we are a UK company. to co-ordinate who does what, so we end up doing Infrastructure; if you look at a broadcast tower
the end to end service as a natural part of what we it’s always a relevant structure for MNOs. If you
TowerXchange: Would you describe Arqiva as do. look at our tower at Crystal Palace it does the TV
a towerco, an infraco or something different broadcasting for most of London, it would be a lost
- we’re trying to understand the language the TowerXchange: We encounter a lot more hybrid opportunity not to use it for telecoms as well. These
industry uses in Europe. broadcast and telecom towercos in Europe than broadcast towers are so big and strong, adding a
elsewhere, and we’re trying to understand why. few antennas for MNOs is easy. The majority of
Nicolas Ott, MD Telecoms, Arqiva: We’re a To what extent do the telecom and broadcast our broadcast towers have antennae for MNOs as
communications infrastructure and media services tower businesses complement one another - are well and they’re liked by our MNO clients as they
company, operating at the heart of the broadcast, a lot of resources and capabilities shared across are high up and stable. There’s no need to duplicate
satellite and mobile communications markets in the the business units, or are they really quite assets and investment with these towers.
UK. distinct operations? Does the relative maturity of
European mobile network infrastructure make In terms of sourcing, for both telcos and TV
If you want a comparison we’re similar to TDF in telecom towers a more typical infrastructure we outsource a lot to third party suppliers for
France or Abertis Telecoms/Cellnex in Spain or investment and thus more natural complement maintenance and other ‘easy’ work, although we
other broadcast infrastructure providers across to broadcast towers than telecom towers in do keep the sophisticated stuff in house. We use
Europe. The African model doesn’t look like Europe higher growth, higher risk markets? the same suppliers for all parts of the business, so

“
of smaller acquisitions, including Spectrum
Interactive, the WiFi business, in 2012 and we
continued to develop the telecoms mast portfolio,
For the MNOs coverage in rural areas won’t provide marketing differentiation
any more. So at a time when profitability in the UK is challenging, they’ll have
to move step by step to a shared tower infrastructure
“ including outsourcing from mobile operators, to
around the 8,600 active macro sites we have today.
Of these, less than 1,000 are broadcast sites, a mix
of former ITA/NTL Broadcast and BBC/National
Grid Wireless masts. In total we have wireless
infrastructure rights on around 16,500 marketable
sites - by ‘marketable’ we mean that a site is
capable of accommodating the equipment of at
when we issue a tender we can propose a bigger create a much more efficient project management least one new wireless operator, but as I mentioned
scope, which means the bidder can offer us a more office by combining everyone together. And last, in not all of these are attractive to use for mobile
competitive price and service. The same applies terms of shared service desks, it becomes possible to operators due to their often remote locations, but
for electricity as we buy electricity on our sites for provide a better service for our customers. nevertheless would be available any time to deploy
both our MNO and broadcast customers, and by MNO or other wireless operator equipment on.
combining we get a better service and price, so our There are some really interesting synergies in all of
customers all benefit. these three areas. TowerXchange: Given unique position of the
UK market with both MBNL and CTIL providing
There are very demanding service level agreements TowerXchange: How has Arqiva’s telecoms tower infrastructure sharing (and more) across all the
(SLAs) in terms of maintenance and, because sites mix developed? operators, how does that affect Arqiva’s role as
are everywhere across the country, putting a bigger a towerco and what your tenants require from
tender makes it easier to find a supplier capable of Nicolas Ott, MD Telecoms, Arqiva: The ITA had been you?
delivering the right SLA at the right price all over renamed a number of times and was known as
the country. NTL Broadcast when it was bought by a Macquarie- Nicolas Ott, MD Telecoms, Arqiva: For us it’s pretty
led consortium in 2005 and then renamed Arqiva. straightforward. If you take the long term view,
When it comes to skills, we keep the most value-add Between 2005 and 2007 we acquired various in 10 years’ time, especially in rural areas, there’s
functions in house. When someone wants to put an satellite assets, and in 2007 we acquired National no valid reason why MNOs would keep duplicated
antenna on a mast you need to do fairly technical Grid Wireless, which included the BBC’s terrestrial towers.
drawings, we do a lot of that in house as we have broadcast assets. Both NTL Broadcast and Crown
to be sure it’s done well. Also in terms of the 4G Castle/National Grid Wireless had developed their When MNOs launched, the big USP was to construct
rollout right now we have about 6,000 requests for own telecoms mast portfolios, before both were towers faster than your competitors and market
4G upgrades, so you need huge project management merged into Arqiva. your network as a competitive advantage. Now
capabilities to manage that. Also for TV we’re when there’s a big spectrum auction in Europe it
working on the next digital upgrades so we can After the merger, Arqiva continued with a number comes with high coverage obligations. For the MNOs

coverage in rural areas won’t provide marketing
“
differentiation any more. So at a time when MNO
profitability in the UK is challenging, they’ll have to
move step by step to a shared tower infrastructure.
So we provide towers to all of them. MBNL and CTIL
are our top two customers. We see it as Arqiva’s’
responsibility to find solutions for MBNL and CTIL
to have the capacity to consolidate their network in
The challenges around capacity solutions is one of the most
the most efficient way.
If you take the long-term view once they complete

their 4G roll out, BT will buy EE and Hutch might
buy O2, so if you look to 2020 and beyond, they’ll
interesting things happening in this industry at the moment “
need to consolidate where they have sites. Most sites
in the UK are still owned by the MNOs themselves;
you’ll often see two masts very close together as
they are owned by CTIL and MBNL. Fundamentally
we will find elegant solutions to help them to reduce You also have to consider what their priorities are second is by far the biggest growth area and that’s
these towers. – 4G rollout is high on their agenda. We meet with capacity solutions. In terms of rural coverage there
them daily, I meet their CTOs every month. The day is still growth; the UK government is investing in
The UK government launched the Mobile they want to put it on the agenda it will happen as it new masts in this area, some MNOs want to densify
Infrastructure Programme (MIP) which constructs is provided for in our contracts with them which are coverage in rural areas and the 4G rollout is a lot of
brand new sites in remote areas where all four designed to allow for future technology upgrades work. There’s good growth there but it’s not game
MNOs are installed. So MIP is a model of what the and growth. changing.
UK will be in five years’ time. It’s not just specific
to the UK, though, every European country is in a TowerXchange: Where is the growth coming from The challenges around capacity solutions, however,
similar situation. in UK communications infrastructure today? For are very exciting. Think about London; we’re often
example, what’s the balance of existing and new struggling to have a decent call in congested places
TowerXchange: What are you doing in response business between macro towers and infill sites - or indoors and the data speed isn’t always what we
to your clients’ long term needs? small cells, metro cells, Wi-Fi and DAS? want. We offer a portfolio of capacity solutions to
Nicolas Ott, MD Telecoms, Arqiva: It’s publicly MNOs, cities and big real estate owners. It might be
available information that we have long-term Nicolas Ott, MD Telecoms, Arqiva: This is one a rooftop, a city cell network, a distributed antenna
contracts with MBNL and CTIL. We have the right of the most interesting things happening in this system in a shopping mall, outdoor small cells on
clauses in place so the ball is in their court and for industry at the moment. There are two main areas street infrastructure, indoor small cells or Wi-Fi. We
them to decide what and how they want to build. for growth; the first is coverage in rural areas, the offer everyone that portfolio of solutions, work out

what problems they want to solve where and then Nicolas Ott, MD Telecoms, Arqiva: It’s an endless for expansion in mainland Europe over the next
pick the best mix to address the issue. debate in the industry. You have to differentiate – few years?
outdoor small cells are always paid for by the MNO,
For example we now provide all the Wi-Fi at it’s part of their coverage solution, it’s just a micro Nicolas Ott, MD Telecoms, Arqiva: No. We don’t
Heathrow. They weren’t happy with the Wi-Fi they site and there’s no difference to any other site. The believe there are synergies in operating on a
had and wanted to provide high quality connectivity big debate is about the indoor solutions. multi-country basis. Every EU country has its
so we provide that for them. MNOs don’t always own equivalent of Arqiva, and a new entrant is
have the right indoor coverage so Arqiva can do this In five years from now if you enter a shopping mall destined to fail. And the multiples we see in tower
as an agnostic host for all four mobile operators – or an airport you won’t go back if you don’t have acquisition of 12x to 16x EBITDA don’t make sense
we did this at Canary Wharf with an indoor and phone or WiFi coverage. In fact, either you won’t to us.
outdoor distributed antenna systems. For a landlord go back at all, or if you go into a coffee shop with a
it’s easier as they only have one company to deal friend who’s with another operator but your friend TowerXchange: Apart from the UK, we’ve seen
with, one set of wires going in and one company has coverage, and you won’t be happy with your relatively few substantial communications
coming out to do maintenance. For the MNO it’s operator so you’re more inclined to switch to the infrastructure transactions and joint ventures
a better price and their service is provided by a other operator with coverage. in recent years, the recent acquisition of Wind’s
company for whom this is a core competency. We’ve towers by Abertis notwithstanding. What are the
been tendering for street infrastructure in several So the long term view is that from a customer point most common drivers for the transfer of assets
London boroughs and we’ve won almost all of of view the landlord has an obligation to provide from MNOs and broadcasters to independent
them, plus contracts in Manchester. We also work coverage but the MNOs also have an obligation to towercos and infracos in Europe, and should we
in partnership with Virgin Media Business who provide coverage. So everyone is in the same boat! expect more transactions in future?
won assets across Birmingham, Leeds and Bradford We have agreed with MNOs that if they don’t have
and the London Borough of Hackney, so we are the coverage we go to see the landlord and we agree Nicolas Ott, MD Telecoms, Arqiva: MNOs will
number one player in the UK to provide the best with them that everyone is contributing. It has to outsource more towers to towercos and the
managed service for small cells to UK operators be a win-win; the time when the one said the other main driver is to generate savings. So right now
via our combined, wireless, fixed, deployment and should pay everything is over. they carry all the costs and capex, but when it’s
operational expertise. We’re in the trial phase with outsourced they create savings.
MNOs but it’s very promising. The roll out of small One of the biggest London flagship department
cells in Japan is hundreds of thousands, so the UK is stores came to us saying their coverage wasn’t I think that outsourcing or selling towers is a
a bit behind but we will catch up. We believe it will good so we went to the MNOs and three of the four complex exercise, so you have to be sure it’s worth
generate significant growth. agreed to contribute to the financing of the solution all the work and pain to do it, which means it has
along with the landlord and Arqiva to implement to be done on a big scale. If you want savings to
TowerXchange: As a growing area there doesn’t the right solution, resulting in a good solution for be material enough to have a big benefit you’ll
seem to be a clear precedent for who pays for a everyone and satisfied customers. do it in a big chunk, not in small pieces, to make
lot of this additional network capacity. How does it worthwhile. So I think we will see some big
it work for your clients? TowerXchange: Does Arqiva have any ambition divestments in future

Entrepreneurial towerco FPS TowerXchange: Tell us about how FPS was
formed and your current footprint - how did you
manage to scale to over 2,000 towers and 20,000
expands beyond rural towers into rooftop sites in just three years?
urban rooftops Frederic Zimer, CEO, FPS Towers: We now have

2,051 towers which we acquired directly from
Insights into how the French tower market is evolving to meet the needs of four Bouygues Telecom which is how the company
MNOs, including a new rollout and a network plan being shaped by RAN-sharing was founded – through a sale and leaseback
agreement between Antin Infrastructure Partners
and Bouygues Telecom. Bouygues Telecom wanted
FPS was formed in 2012 by Antin
to divest, and to create a new player in France
Infrastructure Partners to acquire and
to animate a market dominated by TDF. We can
manage just over 2,000 towers acquired
cover the whole of France but our focus on certain
from Bouygues Telecom. Since then,
locations means our main offering has been in rural
their ambitious growth strategy has led
areas.
to the acquisition of Loxel, a rooftop
management organisation, in 2015,
and further plans to leverage operator Now we are engaged in a two-part development
consolidation and partnerships to plan – one focus is on working to put in place some
Frederic Zimer, CEO, Cedric Lepolard, CFO & Pierre Cassier, Sales Director, FPS Towers gain market share. We spoke to the build to suit towers. FPS sees a way to challenge our
management team (Frederic Zimer, competitors because in France you have towers,
Keywords: 4G, Acquisition, Anchor Tenant, Bouygues, CEO, Cedric Lepolard, CFO and Pierre rooftops, churches, water towers et cetera; you have
Decommissioning, Europe, FPS, France, Free Mobile, Insights, Cassier, Sales Director) of FPS, about maybe five to six main types of site which can be
Europe Insights, Interview, LTE, Market Overview, New Market how the idiosyncrasies of the French used for tenants. With this build to suit programme
Entrant, Operator-Led JV, Orange, Private Equity, Rooftop, SFR, market and how FPS plans to deliver on we’re planning to build towers to densify or to
TDF, Tower People, Towercos, Transfer Assets their growth plans. replace existing sites which are expensive or
complicated to run, and we’re able to propose a
good price for them, so in the next two to three
Read this article to learn: years we expect to build several hundred new
< How FPS’ background has created a unique niche in the French market towers across France.
< FPS’ three-stage plan for growth in France
< The size of the French tower market and who owns the towers In order to complete our footprint in France we also
< How the dynamics of the French market will drive tower growth in the country have to address urban areas. Historically urban
< The impact new towercos such as Cellnex and Inwit have had in galvanising potential tower divestments areas are a complicated area for towercos and
carriers to address as there are many constraints

in terms of zoning and planning. There are also two people in an office signing a lease agreement
aggressive reactions from people who oppose and that’s it, property owners have to focus on their Breaking news
towers near to their houses, so there are a lot of main business. Our proposition is that we can take
complications around deployment in urban areas. any constraints they’re facing with the rooftop, As we go to press FPS have confirmed
We think we’ve found a good way to address this report back as much as needed and share in a long that Antin has acquired the remaining
through the acquisition of a company called LOXEL term process of 20-30 years of added value.
15% stake in FPS from Bouygues Telecom,
which is a council for building owners and which
making Antin 100% owner of the towerco.
manages the relationship between building owners The building owners have the same timescales
and operators. For us it’s a way to quickly grow our as us – these are long term commitments. The Bouygues Telecom will remain a client of
footprint in urban areas, allowing us to instantly lease agreement is reassuring for building owners FPS, with Frederic Zimmer, CEO of FPS
address 20,000 locations in urban areas. because they worry about entering into a short-term commenting ‘Bouygues Telecom remains
relationship without thought for the future. an important client to FPS Towers, and
The next step is to continue with the LOXEL offering the sale of their residual stake reinforces
and at the same time propose an expansion of this TowerXchange: Tell us more about how the
the position of neutrality that we have
concept to building owners in order to put FPS LOXEL portfolio of rooftop terraces fits into your
always had towards our clients’. This is
between the building owners and the operators. portfolio.
We can both own rooftops and lease rooftops and good news for FPS and towercos in general
propose long term partnerships with building Frederic Zimer, CEO, FPS Towers: Our plan for next and confirms their independence, the
owners to commercialise their rooftop real two to three years is to continue deployment and investability of the class and the continuing
estate. We expect to transform our urban areas manage our relationships with all our customers appetite for investment in Europe.
dramatically. – we see this as an opportunity to gain market
share from our competitors. We aim to push our of service). The more points we can propose to our
The key difference between rural and urban sites development programme in both our rural and customers, the more powerful your place in the
is the relationship we have to establish with the urban rooftop portfolios. FPS now employs 70 market. In terms of rooftop growth, we currently
building owners. In urban areas you generally people and we are expecting gross revenue of manage with exclusivity around 20,000 and expect
cannot purchase the entire building, you have to more than €45 million for this year, representing to reach 30-35,000 in the next two years. Within
enter into a good relationship with the building 30% growth in the last three years. We are very this number we also aim to have more than 1,000
owners – their main business is to lease apartments, aggressive in terms of development. rooftop sites owned outright. In terms of value
not rooftops, and that’s the argument we use when added, we seek to own the rooftops and every site
dealing with the building owners. We can manage We want to launch this development programme we have in our portfolio. FPS is a towerco and a
the rooftops and quickly commercialise empty because we feel that our portfolio could be better in towerco is an infrastructure investor and manager –
rooftops as well, you can have this model without terms of footprint and volume to allow us to grow we invest to grow our assets and after that it’s a cash
any constraints on people. The basics are easy to in the ways that we would like and to respond to the machine. That’s why we seek to replicate our rural
understand but it’s a new approach: it’s not only increasing market needs (several thousand points model in urban areas.

TowerXchange: Please introduce us to the French we do expect in the short term is a growth of the comparison – Orange, SFR and Bouygues have on
telecom and broadcast tower market: how is market due to 1) Free Mobile’s need to quickly average 15-17,000 sites each and Free Mobile has
tower ownership divided between operator- deploy its network which means we will see that fewer than 10,000, so they need 5-7,000 more to be
captive and independent towercos? Roughly how in the next two to three years there will still be a able to compete.
many towers and rooftops are in the market, large number of points of service to create. 2) the
how has that grown and how much further diversification process – as the MNOs enter into Then you also have the established operators such
growth is foreseen? What are typical tenancy new technology like 4G or even 5G to provide new as Orange, which is the biggest player in the market.
ratios in France? standards of data, they will need to increase their Orange is focussed on European consolidation but
price and my feeling is that they are on the way to in France they’re not really dynamic in terms of
Cedric Lepolard, CFO, FPS Towers: This is very doing this, meaning MNOs could soon have some mobile, they’re more focussed on fibre. Bouygues
complicated to explain because in Europe and more budget to invest in densification and in new Telecom and SFR have signed a RAN sharing
especially in France the competitive towerco urban points of service which is a good thing for us. agreement and are at the beginning of the process.
market is very new. TDF was the first independent If we can propose to our customers a large amount It’s a massive programme because you have to find
towerco in France and has been operating without of urban points of service, we can facilitate their common process and create a new team which is
competition for a long time. The market was not radio network design within our portfolio and complicated.
really dynamic before our arrival and that’s why it’s for us that’s a strong added value to negotiate and
difficult today to have clear figures in terms of sites discuss with them. Luckily for us FPS was born during the negotiation
and points of service. of this RAN-sharing deal so we’re protected against
TowerXchange: With some commentators losing revenue in the event of consolidation or
FPS is a specialised telecom hosting services suggesting that consolidation is likely (and decommissioning. That means that for us this deal is
company, not an operator or broadcasting indeed needed) in the French market, what are an opportunity – our portfolio is secure but we can
infrastructure provider. That’s the big difference. If the implications for tower sharing? work with SFR and Bouygues to design their new
you can focus on the telecom market in France you common network. In order to build a common and
have at most 65,000 points of service – 30% (around Cedric Lepolard, CFO, FPS Towers: Today in France efficient network it may be necessary to dismantle
20,000) rooftops and the rest (around 45,000) are you have four main operators – Orange, SFR, two existing towers and build a whole new tower,
towers. This means in France you still have a large Bouygues Telecom and Free Mobile. Free Mobile for example if there’s 1km between them you would
market share owned by the MNOs still, especially was the last to enter the market and they have yet to build a new one in the middle. We can build some
Orange and SFR and I think today Orange doesn’t deploy and build their network – something which new towers from this RAN sharing effect.
have an interest in divesting their tower assets. SFR is a legal obligation but of course also necessary
I don’t know; they have a new shareholder called for them. It’s really a specificity of the French If we are clearly talking about dismantling and
Altice and we do not know what its strategy is. market at this time; we have a dynamic actor new builds it’s possible to make a win win deal
obliged to build a network from scratch, and that’s – we see ourselves very much as partners to the
In the short term we cannot see any global a very, very important point for FPS. In terms of MNOs. Redesigning the network is necessary for the
divestment coming from French MNOs, but what point of presence numbers you can make a quick telecom industry, they need to be agile.

TowerXchange: What role will microcells and seems there’s a lot of tower activity in Southern UK, France and Germany, where the market
DAS play as the French network densifies for 4G? Europe, do you feel this will have a knock-on is lead by large towercos with seemingly little
impact in the rest of Europe? appetite to acquire towers?
Pierre Cassier, Sales Director, FPS Towers: I don’t
know how the operators see the technology but Cedric Lepolard, CFO, FPS Towers: I think that the Frederic Zimer, CEO, FPS Towers: I think if you are
in terms of responding to densification and legal consolidation process will be accelerated in the in a dynamic market, as is now the case in France
constraints, I think small cells are very interesting. coming year. For me it’s nonsense to have three compared with the past, you have a place for
That’s why for us the value of the rooftops in the to four MNOs in each country and to have three everybody – for big players with process like TDF
coming years should increase drastically. to four towercos in each country, especially in a and for more entrepreneurial firms like FPS.
mature market. In Brazil or Africa you can launch
TowerXchange: FPS is owned by Antin a towerco relatively quickly and easily with a BTS Our chance is that we’re in a growing market, which
Infrastructure Partners, who also own other programme because it’s a growing market, but in means you can address a new market not only to
tower assets in Europe - how far does this affect Europe you have good infrastructure, you have a try to gain market share from your competitors, but
your remit to extend your footprint beyond lot of funds and I think during the last five years you can profit from the global growth. Due to Free
France? the difficulty has been to go beyond network Mobile and densification in France you can have
rationalisation. a place for global players and in the end, in terms
Cedric Lepolard, CFO, FPS Towers: Antin is a of scale, if you want to build or manage less than
infrastructure fund today focussed on the Eurozone It’s still new to discuss long term programmes with 1,000 towers you can stay small with few people
with several investments across infrastructure, two European operators, this is the main difference but if you want to grow and get over that 1,000
in towercos; FPS in France and Axion in Spain. My between US, a mature market, and Europe; in the US mark and continue to grow, you need to design an
feeling is that we have a lot to do in France in order it’s usual for operators to divest or to operate new organisation with strong governance processes.
to grow but I think FPS is more than an investment, points of presence with towercos In Europe, this is
it’s a real company with strategic projects and a the beginning of the story. It’s important to not lose the entrepreneurial spirit
long term programme. In the short and medium as you grow. At the end of 2012 we employed fewer
term, FPS has a lot to do in France before we Cellnex are probably the best recent example of than 10 people, now the team is more than 70
entertain any international ambitions - it’s the beginning of the story. Cellnex, active on the people, but we try every day to maintain a strong
important to be ‘global’ in the domestic market, by financial market, are clearly aiming to be the pan- relationship between the management and the
which I mean having the visibility and credibility to European player to consolidate the market and to rest of the team to maintain their start-up spirit
address deployment, BTS, solutions in urban areas, address all existing carriers with a common process and entrepreneurialism. I’m convinced that the
new network services, and network design services. and infrastructure relationship across Europe. I am main advantage of FPS compared with TDF is our
We are a young company we want to grow quickly sure that we’re now entering into a period with a lot start-up spirt, our agile processes, our capability to
but we have to take one step at a time. of discussions taking place. respond quickly and to engage people and funds
if necessary. That’s the best model for a towerco:
TowerXchange: Given the volume of transactions TowerXchange: How can smaller and ambitious backed by strong shareholders in terms of capital
in France, Italy and Spain at the moment, it towercos gain market share in markets like the and capabilities

Will we see the same tower
TowerXchange: How would you characterise the
maturity of the European tower industry?
transaction deal flow in Europe Guri Bath, Director, TMT, Citi: From an independent
multi country tower operator perspective I would
which we’ve seen in Africa? say that the industry is in its early stages. However,
significant developments have taken place over the
Citi contrasts tower market maturity in Europe, SSA and MENA recent past with the emergence of a publicly listed
Cellnex in Spain and Inwit in Italy.
Citi’s TMT team in New York and London is renowned for its work advising
Previously the European tower market was very
on global telecom infrastructure transactions, including FSS and MSS (Fixed
localised within each country – TDF in France,
and Mobile Satellite Services), fibre and data centres. However, the majority
Arqiva in the UK, EIT and Raiway in Italy et cetera –
of their work has been on telecom and broadcasting towers, initially driven by
and the European market has evolved in a different
the three U.S. publics’ consolidation of their domestic market in the early part
fashion from US tower market. Many European
of the millennium, later extending into LatAm, Africa, Asia and most recently
towercos started as broadcast service providers and
Europe. Citi’s Gaurav (“Guri”) Bath leads their coverage of Global Telecom
later expanded into telecom site hosting. Unlike the
Infrastructure and has spent a lot of time in Europe recently so TowerXchange US towercos that generate 90+% of their revenues
Guri Bath, Director, TMT, asked him to contrast the European tower market with those Citi has served, from telecom site hosting the Europeans still
Citi and continues to serve, in MEA. generate a significant portion of their revenue from
the provision of broadcasting and other services.
Keywords: Africa, Africa & ME Insights, Asset Register, Citi, Country Risk, Decommissioning, Egypt, For example over 60% of TDF’s revenues come from
Europe, Europe Insights, First Mover Advantage, France, Infrastructure Funds, Infrastructure broadcasting and media services, a slightly higher
Sharing, Insights, Investment, Italy, Lawyers & Advisors, MENA, Market Forecasts, Market Overview, percentage for Arqiva and circa 37% for Cellnex.
Regulation, Rooftop, Sale & Leaseback, Saudi Arabia, Spain, UK, Valuation
From a telecom site hosting point of view, we’re
seeing and expect to continue seeing more
transaction activity in Europe especially with
Cellnex having gone public with a stated intention
< The implications of blending broadcast service provision and decommissioning with the ‘pureplay’
to create a pan-European telecom site hosting
telecom site hosting business
business.
< Why European MNOs need to divest assets to deploy more capital into their networks
< The prospective tower deal flow in Europe and the impact of the current low cost of borrowing
< Is the SSA tower market ‘sold out’? The public market’s reaction to the Cellnex and
< Parties interested in MENA towers Inwit issuances has been very positive and their
valuation levels should support transaction activity;

“
as we speak Cellnex is trading at a 17.2x EBITDA
multiple relative to U.S. towercos at 16.5-19.5x – so
Cellnex, which is a tax payer, is close to the average
of U.S. comps which are either REITs or have
substantial NOLs.
Investor sentiment, needless to say is enhanced many of the European operators have access to long term
by the fact that until Cellnex there was almost no
opportunity to invest in telecom infrastructure
in Europe from a public market perspective and
participate in the opportunity for inorganic growth
across the continent.
unsecured debt at very attractive rates – so tower divestitures
would have to be at a fairly high multiple to be a compelling
option given the low cost of borrowing
“
For some time, the view of the investment
community has been that European MNOs need to
divest non core assets to deploy more capital into
their networks. According to GSMA statistics, over markets, it feels like early days for European towers, unsecured debt at very attractive rates – so tower
recent years capex per subscriber has been around with MNOs still evaluating the impact of tower divestitures would have to be at a fairly high
US$80-90 in the U.S., whereas Western Europe has divestiture on their competitive position: European multiple to be a compelling option given the low
lagged at US$40-50 per subscriber. Network capacity operators are still trying to get comfortable with the cost of borrowing.
in Europe needs to keep up with the exponential idea that their tower network may no longer be a
growth in demand for data all of which bodes well strategic differentiator. The Cellnex-Wind deal in Italy will be a benchmark:
for the telecom infrastructure sector in Europe. operators will see how that does over the next 12-24
Appetite also varies by operator. Some who have months. That may provide the proof of concept for
TowerXchange: Could we see the volume of tower done a number of tower transactions in other other MNOs in similar positions.
transactions pick up in Europe like we saw in markets be it LatAm, Africa or even Europe, clearly
Africa over the last 18 months? see the advantage of divesting towers and could take TowerXchange: How does the structure of the
a leading approach in Europe as well. tower market, and the opportunity to create
Guri Bath, Director, TMT, Citi: The prospects for capital value, differ given the decommissioning
deal flow vary by market. I would put the UK and One of the factors that could impact the pace of and broadcast elements of the business in
France in a different bucket than the rest of Europe: transaction activity in some European markets is Europe?
Arqiva and TDF have been established a long time that the incumbent operator doesn’t necessarily
and, apart from a handful of interesting smaller need cash from tower monetisations to improve Guri Bath, Director, TMT, Citi: Investors in Europe’s
independent towercos, the UK and France tower their capital structure. In addition, many of the big four towercos, Cellnex, TDF, Inwit and Arqiva,
markets are relatively mature. Excluding those European operators have access to long term are cognisant that they provide a different risk

“
The other difference is higher preponderance
of rooftops in European markets, which enables
unique business models. There are parties out there
for whom a significant proportion of their success
will come from actively looking to make the rooftop
business look like the greenfield tower business
Decommissioning gets priced into M&A through location by based on the ability to add additional tenants.
location analysis, and here the first entrant has an advantage as

they can be more selective about what they buy based on how
much intel they have
“ TowerXchange: Are there enough prospective
buyers of European towers for MNOs to feel they
can get full value?
Guri Bath, Director, TMT, Citi: I think there are

enough buyers to create healthy competition for
towers in Europe. Cellnex has changed the equation,
Inwit may add more competition, the Americans
profile and investment opportunity compared to a Cellnex made a small acquisition of broadcast have dipped their toes into the market, although
pureplay telecom towerco. assets to get into Italy prior to the Wind deal – but internationally they remain more LatAm focused
I don’t see that as basis of growth. I don’t foresee than Europe, and there are several private tower
Existing towercos coming into Europe are more towercos trying to consolidate European broadcast companies of scale with strong financial backers
likely to favour a traditional telecom site hosting infrastructure – it’s a different animal in each who are also likely to participate.
business model and will be less keen on broadcast country, each with it’s own unique regulatory
infrastructure, which will likely remain in the environment. There are also a lot of infrastructure players
hands of operators such as EIT, Raiway, Axion, active on the broadcast side of the market who
Towercast, Towercom et cetera. The US publics The significance of the decommissioning play also are expanding their interest to bid for traditional
will be inclined to sustain their focus on the pure varies by market. Markets that have had third telecom tower assets. For example, we’re running a
play telecom site hosting business model – this is party tower operators like the UK and France have process in the Middle East in which we are seeing
their core competency and it’s what their investors a lower decommissioning need than in Italy or strong interest from strategics, private equity, SWFs,
understand. The broadcast business is different in Spain, for example, where there is more parallel and infrastructure funds.
terms of uptime, headcount-heavy operations to infrastructure. Decommissioning gets priced into
actively manage assets, and it’s a more regulated M&A through location by location analysis, and TowerXchange: How do the challenges involved
market. here the first entrant has an advantage as they can in getting a tower deal done in Europe compare
be more selective about what they buy based on to those in Africa?
Traditional telecom site hosting companies might how much intel they have. Once a towerco is on the
buy broadcast assets to enter a market – for example ground, they quickly build their own databases. Guri Bath, Director, TMT, Citi: The European

regulatory environment is more developed than the level of tower transaction activity in Africa will ecosystem, a region which has just seen it’s
in some emerging markets, so the parameters of slow down materially – there are still significant first tower transaction in Egypt between Eaton
documentation and approvals you need are fairly markets where MNOs have not yet divested towers. and MobiNil. Are there a number of advisors
well defined. Ground leases and licenses are much Given the performance and operational successes and bidders in common, or is it effectively
simpler in Europe than in Africa. to date – some isolated glitches notwithstanding a distinct market with it’s own drivers and
– MNOs have confidence in Africa’s towercos to benchmarks?
But the challenges around how much detail MNOs deliver on SLAs and will continue to divest assets
have on their tower portfolio are still present in and to allocate build to suit programmes. Guri Bath, Director, TMT, Citi: Even though the
both markets. In most cases the assets are still Egypt transaction was relatively small, we believe
not managed independently, so there’s the same I expect tower transactions to continue from it is a harbinger of increased transaction activity
challenge for the prospective acquirer to get the SSA’s other MNOs. In fact, TowerXchange did a in MEA and the opportunity for the creation of
necessary site by site detail. great piece showing the markets that have and an independent tower business in MENA. The
have not seen tower activity in Africa (Editor: see success of the first sizable transaction should
Europe presents a less complex operating “Contrasting the appetite to divest towers among drive others to consider divesting assets.
environment, with the majority of towers on grid, the top African and Middle Eastern MNOs”).
which provides a degree of management comfort In terms of overlap with SSA, there is a significant
for the seller. TowerXchange: Since 2012, we’ve seen tower amount of overlap in advisory work – it’s critical
transactions in Africa focusing on the assets of to use experienced advisors in markets where
Finally, it generally takes less time to get a tower the so-called tier one operators: Airtel, Etisalat, many tower processes have started, but few have
transaction from start to finish in Europe than Millicom, MTN and Orange. Is there much concluded successfully. In terms of buyers, I’d say
in Africa or even LatAm, again thanks to the prospect for tier two operators to partner with the initial interest probably comes from existing
clarity around regulations and the relative ease of towercos, albeit presumably on different terms? emerging and frontier market tower companies
managing information. that have mandates which do not limit them
Guri Bath, Director, TMT, Citi: In markets where geographically – some of the Asian towercos also
TowerXchange: Changing topics to Africa - have we’ve seen transactions with market leaders, have MENA in their sights. Given the availability
Africa’s ‘Big Four’ towercos now reached scale? it will be easier for tier two operators to find a of assets within their existing footprints
Have they bought most of the assets they want, towerco partner. It will remain difficult to monetise developed market towercos may take longer to
South Africa notwithstanding? a tier two operator’s towers in markets where move into MENA, but there is still a large group of
independent towercos have not yet emerged strategic buyers and financial investors very keen
Guri Bath, Director, TMT, Citi: Africa’s ‘Big Four’ particularly given the availability of assets from the to invest in MENA towers.
towercos have definitely reached scale – each bigger MNOs; I think the opportunity to buy assets
is a viable independent towerco now. Based on from tier one operators will remain the focus of As a lot of the economies in MENA are oil driven,
TowerXchange’s last report IHS has over 20,000 Africa’s towercos in the near term. there is a lot of US$ exposure or indeed the
towers, AMT over 10,000 and Eaton and Helios currency may be US$ linked, which helps buyers
Towers Africa over 5,000 each. But I don’t think TowerXchange: How does MENA fit into this manage one of bigger risks to the tower business

Floorplan
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FPS Towers
Private
meeting 303 103
Private
meeting FPS Towers, the only telecom tower pure player in
room room
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302 301 102 101 and rents/manages almost 20,000 rooftops.
Access to main Disabled In the three years since its launch, FPS Towers has
Meetup room access
demonstrated consistent organic and external growth:
Entrance, exit & CAGR > 35% and a high level EBITDA margin from new
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long-term hosting agreements, boosting tenancy ratio
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FPS Towers owes its strong yet controlled growth to a

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industry and a workforce that is fully invested in its
corporate motto: “ Reaching your goals”. FPS Towers
delivers secured and valued sites to wireless carriers or
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To meet the challenges of the extraordinary demand

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sites (such as towers, rooftops and water towers).
http://www.fpstowers.fr

Our sponsors & exhibitors
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management software and the trusted partner of leading
Acsys Invendis telecom infrastructure operators in 20 countries. The
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and Tarantula software is a fundamental pillar of support
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The Tarantula software platform is the industry standard
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with over 1 lakh remote assets across Asia, Middle-East, Siterra, an Accruent Product, addresses the software
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operationally as well as consolidate and integrate tower- Operating in FULL OPEX model within an extremely BRONZE SPONSOR:
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infracos that TowerXchange tracks are current Siterra company holds a market share greater than 80%.
customers, spanning 15 countries and five continents. The Medipower experience is replicable globally, relying on
first version of the Siterra site management platform was the “best-in-class” technology provided by Ausonia: AC Vinson & Elkins RLLP
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international law firms, with approximately 700 lawyers
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located in 15 offices around the world.
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that are deployed regularly through the SaaS platform partner to globally approach network implementation
Our global telecommunications team has extensive
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TX MeetupEuropeProspectus 2016

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Tuesday 12 and Wednesday 13 April, Business Design Centre, London

Meetup Europe 2016

For more information visit www.towerxchange.com/meetups/meetup-europe

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Opportunities for towercos in small cells & DAS

Roundtable session 2: 14:10-15:10, 12 April

Sourcing capital in Russia & the CIS

Country Focus: Germany

4 | TowerXchange Meetup Europe, 12-13 April, London | www.towerxchange.com/meetups/meetup-europe

Subcontractor performance management Change management: transitioning people and

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Laser beam focus on towers

Another problem with other telecom events is that

Curated expo of proven suppliers

10 | TowerXchange Meetup Europe, 12-13 April, London | www.towerxchange.com/meetups/meetup-europe

Unique structured networking

TowerXchange’s renowned round table breakouts are

Unique round table breakouts

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TowerXchange is your independent

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10,000 In Russia, the sale of Vimpelcom’s 10,400 towers

Russia’s first major tower transaction. Following

the completion of the sale it is widely expected

potential divestitures across their CIS markets, in a

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The other major piece of news is the imminent

TowerXchange are currently tracking 67 towercos,

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Totals / average 25,832 2,002,600,000 114,973 Source: TowerXchange

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TowerXchange research has not revealed any infracos or

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telecom towers? TowerXchange have been studying the emerging

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The inauguration of Cellnex, already highly

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Consider this; there are maybe 10-12 bona fide build

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in European towers 3GIS: Operates a shared network between Telenor

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TAP Advisors: Boutique M&A and investment

TDF (Télédiffusion de France): Leading French

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Telemont: Leading Russian tower I&C and O&M

Telenor: Multinational Norwegian owned MNO

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“If we get to half the level of outsourcing as the US

Wireless Towers: Formed in January 2016,