Wednesday, 02 December 2020

Telstra subdivides to capitalise on tower assets

by Harry Baldock, Total Telecom
Thursday 12 November 20

The Australian operator said its new structure will reflect the “new world” created in the wake of the pandemic

With the pandemic driving the need for connectivity through the roof, the telecoms sector is one of the few industries to be holding their own in the COVID economy. That is not to say they have been immune to the economic pressures however, having to support their vulnerable customers during this time and try to find profit in a strained economy…

With the pandemic driving the need for connectivity through the roof, the telecoms sector is one of the few industries to be holding their own in the COVID economy. That is not to say they have been immune to the economic pressures however, having to support their vulnerable customers during this time and try to find profit in a strained economy. Furthermore, for many operators this comes at a time when they are deploying expensive 5G.
 
Now, Telstra is announcing a new strategy to overcome their pandemic struggles, subdividing its business into infrastructure, mobile tower, and RAN and spectrum units.
 
“The challenges and disruptions of the last 6-12 months have reinforced the increasing value of infrastructure assets globally,” noted Telstra CEO Andrew Penn.
 
The move is expected to be complete by the end of the year, after which Telstra will move to monetise its mobile tower assets, which have been valued at around $3.3 billion.
 
Finding a buyer will likely be no problem – tower infrastructure has been selling at an incredible rate around the world – though Telstra did note that its valuation would be related to how much access they retained to the towers after the sale.
 
The scale of the demand for mobile towers has become very obvious over the last year. In the past few months alone, Airtel Africa is selling 4,500 towers on the African continent; in the US, American Tower has recently purchased InSite Wireless for $3.5 billion, taking ownership of some Canadian towers for the first time; and in Europe, rampaging Spanish operator Cellnex is in the process of buying CK Hutchison’s European tower businesses for around €9 billion
 
Tower infrastructure demand is soaring and Telstra will not be the last to take advantage.
 
 
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