What’s up with… Zayo, EQT, Crown Castle, Telefónica, VodafoneZiggo

• Zayo, EQT splash $8.5bn on Crown Castle fibre, small cell assets
• More top table changes at Telefónica
• Liberty Global eyes control of VodafoneZiggo

In today’s industry news roundup: US operator Zayo and one of its investors, EQT, are buying Crown Castle’s US fibre network and small cells businesses, respectively, for a total of $8.5bn; Telefónica’s top team is undergoing yet more changes with the formation of a transformation office; Liberty Global is believed to be interested in buying out its joint venture partner at Dutch operator VodafoneZiggo; and much more!

Zayo, the US long-distance network operator owned by investment firms DigitalBridge and EQT and which recently unveiled plans to build more than 5,000 fibre network route miles in the US “to meet the growing demands of AI workloads”, has struck a deal to acquire Crown Castle’s fibre solutions business for $4.25bn in a move that significantly extends the reach of its network to tens of thousands of buildings and other locations that require high-speed connectivity. “This acquisition advances Zayo’s strategic focus on investing in the critical fibre infrastructure that will support the growth of artificial intelligence (AI) across the United States and drive economic acceleration, allowing enterprises to scale, compete and thrive in an increasingly digital world,” noted Zayo. “Crown Castle’s complementary metro-focused fibre assets extend Zayo’s reach into strategically important geographies and will work hand in hand with the company’s existing long-haul networks to connect datacentres across the country, enabling mission-critical connectivity in cities and rural communities nationwide. With the Crown Castle assets, Zayo will provide enterprises with improved access to the networks that power cloud computing and AI, adding approximately 90,000 route miles of fibre to Zayo’s network and increasing its overall reach to more than 70,000 on-net locations.” Zayo had been tipped in late January to acquire Crown Castle’s assets. Zayo CEO Steve Smith noted: “We are strategically investing in expanding and enhancing our country’s critical network infrastructure to meet the demands of hyperscalers, datacentres, enterprises and carriers that will facilitate the growing AI economy. This acquisition strengthens our ability to deliver the reliable, low-latency, high-capacity fibre solutions our customers need to scale in an increasingly data-driven world, and furthers our commitment to providing world-class customer service and solutions.” Read more.

But that major acquisition is only part of the story… While Zayo is buying Crown Castle’s fibre infrastructure, one of its investors, EQT, is separately buying Crown Castle’s small cells business, which has 115,000 small cells across 43 US states that provide wholesale cellular connectivity to AT&T, T-Mobile US and Verizon, for $4.25bn. “Small cell networks are an essential part of the digital infrastructure ecosystem,” stated Alexander Greenbaum, partner and head of EQT’s Active Core Infrastructure advisory team in this announcement. “With EQT’s deep experience in digital infrastructure and active approach to value creation, we see significant opportunity to support the company’s continued growth,” added Greenbaum. EQT Infrastructure Advisory partner Nirav Shah stated: “Crown Castle’s Small Cells Solutions business is a platform at the heart of the next generation of digital infrastructure, enabling essential digital connectivity that will help power the future. With its significant scale, operational excellence, and deep carrier relationships, the company is poised to benefit from positive digital tailwinds. We look forward to partnering with the business to help fuel its next phase of growth, drive cutting-edge innovation, and support the long-term expansion of critical digital infrastructure.” Once the respective deals to acquire assets from Crown Castle are concluded, Zayo and EQT’s small cells business will seal a long-term deal for Zayo to provide fibre connections to the small cells business. 

The news of Crown Castle’s $8.5bn divestments, which will leave the company as a “pure play” telecom towers company, came as it reported a 3% dip in full year revenues to $6.36bn, a 6% decrease in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) to $4.16bn and a net loss of $3.9bn. “I am excited to announce that we have concluded the strategic review of our fibre segment with an agreement to sell our small cells and fibre solutions businesses for $8.5 billion,” stated CEO Steven Moskowitz. “We believe a focused, pure-play US tower business will be uniquely well positioned to benefit from the anticipated consistent growth in mobile data demand as we plan to continue to unlock additional value by pursuing initiatives that enhance customer service, revenue growth, capital discipline, and operational excellence.” Read more. 

Just a week after announcing sweeping changes to its top management team, Telefónica has unveiled further significant management team appointments. The Spanish telco has formed a Transformation Office to be led by María García-Legaz, who will support the new COO, Emilio Gayo. García-Legaz is currently chief of staff and so has extensive knowledge of Telefónica, where she has worked for more than 30 years in multiple senior roles. “From her new position she will support the company in its announced strategic review,” noted the operator. Her role is being filled by Álvaro Echevarría, who is to join the telco’s executive team as chief of staff in the coming weeks. Echevarría is currently deputy general manager and director of institutional relations and corporate security at Banco Sabadell, where he has held multiple senior roles over the past 22 years. Also, Piedad Álvarez de Arriba joins Telefónica as global security director: Currently she is the chief commissioner and, until now, head of the Central Cybercrime Unit of the Judicial Police. She replaces Miguel Sánchez, who is retiring. 

Liberty Global wants to buy out Vodafone Group from their Dutch joint venture, VodafoneZiggo, Bloomberg has reported, noting that Vodafone’s stake in the operator would likely be valued at about €2bn. VodafoneZiggo reported full year revenues of €4.1bn in 2024, flat year on year, and adjusted EBITDA of €1.88bn, up 3.1%, but those numbers were propped up by its enterprise services unit as the operator ended last year with slightly fewer consumer customers for both its mobile and fixed services (it ended 2024 with 5.58 million mobile and 3.42 million fixed connections) and as a result its full year consumer mobile and fixed revenues dipped slightly compared with 2023’s numbers.  

Denmark’s Centre for Cybersecurity has published a new threat assessment for the cyber threat to the telecommunications sector in which it has raised the threat level for cyber espionage against the telecom sector from medium to high. “Cyber ​​espionage against the telecommunications sector in Europe has increased, which also increases the threat to the Danish telecommunications sector,” it noted in this announcement (in Danish). Laila Reenberg, former director of the Danish Agency for Social Security, stated: “We all – both professionally and privately – need everything from telephony to the internet to work. The telecommunications sector plays an incredibly important role here. Society is completely dependent on a well-functioning digital infrastructure and it is, therefore, important that the sector is aware of the threat so that they can prepare as best as possible.” 

Still with security matters… We reported previously that the new chairman of the Federal Communications Commission (FCC) Brendan Carr had announced the formation of a national security council to help thwart cyberattacks and keep the US ahead of rivals in key tech areas, such as AI. Well, here are some more details… The Council for National Security “will leverage the full range of the commission’s regulatory, investigatory and enforcement authorities to promote America’s national security and counter foreign adversaries, particularly the threats posed by the People’s Republic of China (PRC) and Chinese Communist Party (CCP),” noted the FCC in this announcement. The council has three main goals: Reduce the American technology and telecommunications sectors’ trade and supply chain dependencies on foreign adversaries; mitigate America’s vulnerabilities to cyberattacks, espionage, and surveillance by foreign adversaries; and ensure the US wins the strategic competition with China over critical technologies, such as 5G and 6G, AI, satellites and space, quantum computing, robotics and autonomous systems, and the internet of things.” That’s quite a lot. “Today, the country faces a persistent and constant threat from foreign adversaries, particularly the CCP,” stated Carr. “These bad actors are always exploring ways to breach our networks, devices and technology ecosystem. It is more important than ever that the FCC remain vigilant and protect Americans and American companies from these threats. Because these threats now cut across a range of sectors that the FCC regulates, it is important that the FCC’s national security efforts pull resources from a variety of FCC organisations,” he added. Carr has appointed his national security counsel, Adam Chan, as the first director of the FCC’s Council on National Security. 

As fears grow of a lasting international trade war and global supply chain disruptions, European nations are, once again, trying to collectively bolster the region’s chip development and production sector. At the behest of the Netherlands, nine European Union member states have formed the Semicon Coalition to focus “on the development of new, reliable and innovative technologies, strengthening and expanding Europe’s position in the value chain and enabling faster commercialisation of research.” The coalition’s members – Austria, Belgium, Finland, France, Germany, Italy, Poland, Spain and the Netherlands – note that “better cooperation enhances technological sovereignty, resilience and strategic autonomy of the EU. The Semicon Coalition will work together with the European Commission” to enhance the region’s chip sector: Its main objectives are “expanding production capacity within the EU and further strengthening Europe’s current key leading positions within the global semiconductor value chain” and tapping into available funding. The coalition members note that “at present, a joint financing of €43bn is available for the European semiconductor industry through the EU Chips Act. Other large public multibillion investments are the CHIPS & Science Act in the US, The Big Fund in China and several substantial initiatives in South Korea, Taiwan and Japan. Together with the European Commission the new Semicon Coalition will explore support possibilities within Europe for the long term.” Will this result in any meaningful outcome, though? And, if it does, will it all be too late? (Other rhetorical questions are available on request…) In the meantime, the coalition members say they will, in the coming months, work with the European Commission on a declaration that all European Union member states will be able to support. So, many long lunches will be had before any chips are on the table, it seems. (Other bad jokes are also available upon request…)   

Major UK wholesale fibre-to-the-premises altnet CityFibre is reportedly lining up fresh funding to (in part) help fund its M&A ambitions, according to multiple reports and an investment update note from New Street Research. Sky News recently reported that existing shareholders are set to pump more money (around £500m) into CityFibre, which recently reported a (small) annual pre-tax profit for the first time, to help fund its planned acquisitions. That new equity investment would be backed up by new debt facility agreements, according to the report. TelecomTV heard late last year that CityFibre was in takeover talks with at least five smaller (but unidentified) UK fibre altnets as the broadband sector’s big guns look for cost-efficient ways to gain further scale and expand their reach – joint venture wholesale operator Nexfibre, one of CityFibre’s main rivals, is also expected to splash some M&A cash. CityFibre already has experience of acquiring to grow, having snapped up a number of altnets in the past few years, most notably Lit Fibre in 2024. Following the funding reports, New Street Research issued a 13-page analysis of CityFibre’s current position and strategy, which noted that the company is now more focused on growth through the award of UK Project Gigabit contracts and from acquisitions (rather than ongoing major investments in its own organic fibre rollouts). The New Street Research team believes CityFibre is in exclusive takeover talks with altnets that, between them, pass 850,000 premises with their deployed fibre lines. CityFibre’s network currently passes more than 4 million premises and it’s aiming to pass more than 8 million by 2028. There appears to be a consensus that 2025 will be the year when many UK fibre broadband M&A deals will be done as there are still scores of small operators that have invested in their own infrastructure but which now need to become part of a bigger company to remain viable – “distressed asset” sales might be the order of the day this year in the UK broadband sector.         

– The staff, TelecomTV