Liberty Global launching data centre JV to monetise assets

Liberty Global has announced a new joint venture (JV) with digital infrastructure fund Digital Colony, aiming to create a European edge data centre business with around 120 active data centre locations.

With 5G being rolled out at pace throughout Europe and data traffic increasing steadily, the computing power of a network is gradually being moved away from the core and towards the ‘edge’, allowing for lower latency and reduced bandwidth consumption. Facilitating this edge computing will require that computing power be located closer to the end user, hence the value of such a large network of data centres.

Called AtlasEdge Data Centres and led by ex-Interxion CFO Josh Joshi, the new business will see Liberty Global’s digital infrastructure assets combined with Digital Colony’s capital to support the growth and consolidation of opportunity in edge co-location services across Europe.

“The proposed joint venture presents significant growth opportunities as we look to build this business into a leading European edge data centre operator,” explained Mike Fries, CEO of Liberty Global. “Furthermore, since several of our operating companies will become anchor tenants, Liberty Global customers will also benefit from better and more responsive services.”

This strategic merger represents an interesting alternative to the migration towards public cloud providers like Amazon, Google, and Microsoft that we have seen from telecoms operators. In the last month alone, we have seen Vodafone increase its partnership with Google Cloud, while Telefonica penned a deal with Microsoft for its Azure Private Edge Zone. 

Meanwhile, operators around the world continue to divest of their physical assets. With data traffic surging, the appetite for digital infrastructure is higher than ever. Investors are purchasing thousands of mobile towers, the largest of which belongs to Spain’s Cellnex, who are looking to close a deal for CK Hutchison’s European towers for around €10 billion. 

With investors willing to pay a premium and operators looking to free up cash to expand their 5G and fibre rollouts, the digital infrastructure market is booming. This deal from Liberty Global simply follows this trend, suggesting that data centres will be the next type of digital infrastructure asset major investment.

The transaction is ultimately due to close in Q3 of this year, subject to regulatory approvals.

In related news, last week saw the UK’s Competition and Markets Authority give the green light to the £31 billion merger of Liberty Global’s Virgin Media with Telefonica’s O2. The move will create  a converged operator set to take on dominance of market leader BT, having promised to invest £10 billion in capex over the next five years. 

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