Vodafone NZ sells tower portfolio for $1bn cash-in

• Vodafone New Zealand (Vodafone NZ) agrees to divest nearly 1,500 towers for NZD$1.7bn (US$1.05bn)
• An additional commitment around new tower sites in the next decade is set to boost Vodafone’s coverage and capacity capabilities
• The New Zealand telco continues an industry-wide trend of tower asset sales in pursuit of cash for core operations

Vodafone New Zealand has struck a deal to sell 1,484 mobile towers for NZD$1.7bn (US$1.05bn), as it gets on the bandwagon to seek available cash for core operations, including 5G and fibre deployments.

As per the agreement, a new TowerCo business will be created; its ownership will include a 40% stake by InfraRed Capital Partners and another 40% stake by Northleaf Capital Partners. The remaining 20% will be obtained through a reinvestment by Infratil, which has owned almost 50% of Vodafone NZ since July 2019. The telco’s other owner is Brookfield Asset Management.

The new entity is set to become “the largest New Zealand towers business, covering over 98% of New Zealand’s population”, Vodafone NZ noted in a statement.

The operator will have access to the towers for 20 years, in addition to at least 390 new tower sites that will be built in the coming decade to improve Vodafone NZ’s “relative coverage and capacity position”.

The telco will retain ownership over the active elements of its network such as radio access equipment and spectrum access – assets on which the company wants to focus its investments.

As Vodafone NZ CEO Jason Paris put it, the move will help the telco “accelerate the rollout of critical infrastructure for our customers”.

The transaction is scheduled for completion in quarter four, subject to approval from the nation’s Overseas Investment Office.

Vodafone NZ’s announcement comes a week after rival domestic telco Spark New Zealand unveiled a sale of 70% of its towers unit for NZD$900m (US$550m) – see What’s up with… Spark’s TowerCo, 5G in India, Orange and MásMóvil.

Both steps are part of an ongoing movement by operators to monetise their passive infrastructure assets to raise much-needed cash, which will go towards processes deemed more vital to their strategies, such as ubiquitous 5G and fibre coverage, and distributed, cloud-enabled platforms to support digital service delivery for enterprise as well as consumer customers. 

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV