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A worthwhile flurry of activity? Mobile towers companies in focus

17 March 2021
Access report

The wave of deal-making in the European towers sector is driven by cash-strapped telcos seeking a form of sale and leaseback financing.

While the operators are incentivised to provide a medium-term growth trajectory for these towers companies, sustainability of that growth is more questionable, especially as 5G will not require additional base stations.

Cellnex continues to insinuate itself into the UK market with its most recent deal signaling the ultimate unwinding of the MBNL JV. Further UK towers consolidation seems a long way off but could facilitate, or indeed be facilitated by, consolidation at the MNO level.

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Both H3G/Vodafone and H3G/O2/Virgin Media combinations seem possible although each has its own complexity—existing network sharing arrangements being one of them.

With 5G delays and mounting costs following the decision to ban Huawei, consolidation is increasingly feeling like the most viable option for H3G whose returns are already too low and falling rapidly.

Access report

  • Vodafone: Leverage looms large

    10 February 2021

    Generating cash is top of Vodafone’s agenda right now, and we may be seeing early signs of that driving operational tactics ahead of resolving its leverage crisis through either an IPO of Vantage or a sale of its Iberian assets.

    EBITDA growth would really help. Analyst forecasts of +4% for next year are not supported by recent history and a simple bounce-back of roaming revenues should not be assumed.

    Q3 results were a mixed bag with the very slight improvement in revenue trends accounted for by easing roaming pressure. Green shoots in German fixed is a highlight, with growth in UK mobile a touch disappointing.

    Access report

  • Back in play: Merger prospects in UK mobile resurrected

    6 October 2020

    With the European Commission’s decision to block the H3G/O2 merger annulled and with new H3G management sounding a very pro-consolidation tone, the prospect of mobile operators going from four to three in the UK seems to be back on the cards.

    Both H3G/Vodafone and H3G/O2/Virgin Media combinations seem possible although each has its own complexity—existing network sharing arrangements being one of them.

    With 5G delays and mounting costs following the decision to ban Huawei, consolidation is increasingly feeling like the most viable option for H3G whose returns are already too low and falling rapidly.

    Access report