Vodafone plans IPO of 'Europe's biggest tower business'
Vodafone (VOD) has announced plans to float its new mobile phone mast business on the stock market in Frankfurt early next year.
The telecoms giant said Vantage Towers was Europe’s largest tower infrastructure company, with more than 68,000 towers in nine countries forming the “backbone” of mobile networks and digital services.
Vodafone’s 50% stake in CTIL, a joint venture with O2 which runs phone masts in the UK, may be included within Vantage Towers. The inclusion of Vodafone’s 33.2% stake in Italy’s main tower operator INWIT, a joint venture between Vodafone Italy and Telecoms Italia, has also been confirmed.
The separation of Vodafone’s towers from the rest of the business in a bid to monetise the infrastructure was first announced in June last year. It has been operationally separate since May this year.
Michael Hewson, chief market analyst at CMC Markets, said the IPO could free up extra capital of up to €5bn and help fund the rollout of 5G. Vodafone plans to retain a majority stake after the initial public offering (IPO).
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On Friday Vodafone also announced its service revenue rose 1.3% year-on-year in the first quarter of the year to €9.1bn. But it saw a 1.3% decline in its preferred measure of organic revenue, which looks at performance on a “comparable” basis that takes into account mergers and exchange rate movements.
The update knocked Vodafone’s shares, sending them down 3.9% at around 9.30am in London on Friday.
The company blamed lower revenue from users abroad, reflecting “the impact of lower pre-paid SIM sales to tourists and migrant workers” and lower roaming income. Roaming and visitor revenue was down by around 70% in Europe.
Delayed corporate projects and use of Internet of Things technology in the car industry during the pandemic also hit business revenue in Europe. But this was partially offset by higher revenue from firms using its services with many employees at home. Its earnings outlook remains unchanged for the full year.
