Telefonica finalises €1.5 bn German tower sale with Telxius

Back in November, Telefonica announced a new global strategy, pulling back from many of its international markets to focus its attention on those back home. As part of this plan, Telefonica set up Telefonica Infra, a division focussing on developing and monetising infrastructure, especially tower sites.

At the heart of Telefonica Infra, is Telxius, the operator’s majority-owned tower company, which is today preparing to buy 10,100 Telefonica Deutschland mobile sites.

The purchase has been valued at €1.5 billion and will increase Telxius’ portfolio to over 32,800 sites in six countries. As part of the deal, Telxius has also agreed to build a further 2,400 sites over the next four years.

The sites being sold will still be leased to Telefonica Deutschland.

This sale has been in the works since April, with Telefonica Deutschland’s CEO reportedly noting “extremely high demand” for the company’s towers. 

Ultimately, it seems that the price was right, with Telefonica now hoping to use the funds gained to reduce its debt and invest in 5G. 

As always, the deal awaits the approval of the regulatory authorities.

This is the latest in a long string of tower sales taking place all over the world, particularly in Europe, as operators rush to raise cash for 5G. Infrastructure giant Cellnex has been a particular beneficiary of this process in recent months. 

However, tower infrastructure will continue to be integral to network services for the foreseeable future, so deals of this nature always are a toss-up between short-term cash and long term investment. In Telefonica Deutschland’s case, long-term lease deal with Telxius will ensure that they have access to the infrastructure for the next decade or so, but what the tower infrastructure infrastructure ecosystem will look like into the 2030s is up for debate.

How has the coronavirus pandemic affected German connectivity? Find out from the experts at this year's Connected Germany 

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