A1 Telekom Austria Group spins off radio tower business

The A1 Telekom Austria Group hopes for more efficiency if it outsources its radio tower business to its own public limited company. The corresponding resolution was passed on Tuesday at an extraordinary general meeting of shareholders. The passive parts of the mobile radio transmitters outside of Belarus are transferred to the new EuroTeleSites AG.

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Existing shareholders will receive a share certificate in the new radio tower company for every four A1 shares. EuroTeleSites is to be listed on the Vienna Stock Exchange in autumn. From now on, the A1 mobile networks in Austria, Bulgaria, Croatia, North Macedonia, Serbia and Slovenia will have to pay rent for their own radio towers. At the same time, EuroTeleSites will try to win over other network operators as tenants.

Alejandro Plater, Chief Operating Officer of the A1 Telekom Austria Group, sees an “important strategic course” set: “The existing systems can then be used better and the network expansion will be faster and more efficient.” The A1 Telekom Austria Group is majority owned by América Móvil and is therefore under Mexican control. The ownership structure of the new company will correspond to that of A1 for the time being: AMX holds 51 percent, the Republic Holding ÖBAG 28.42 percent, the rest is in free float.

TowerCo

The idea of ​​having radio tower real estate managed by a separate company (so-called TowerCo), which is open to several network operators, is not new. American Tower was founded in the USA in 1995 as a subsidiary of American Radio Systems and went public in 1998 as an independent company. The example caught on.

In 2002, for example, Deutsche Telekom founded a subsidiary called Deutsche Funkturm GmbH based in Münster. This year, investors from Canada and the USA took over 51 percent of the shares in Deutsche Funkturm. Vodafone’s comparable subsidiary Vantage Towers has been listed on the Frankfurt Stock Exchange since March 2021, but Vodafone has retained a majority stake.

However, the TowerCo business model is not as popular in Europe as it is on other continents. This is partly due to the fact that European network operators have long shared the use of competitor transmission masts and are sometimes even legally forced to do so. This means that the efficiency reserves that still need to be raised are not that large. The new EuroTeleSites AG is also faced with the challenge that many network operators’ investments in infrastructure are currently falling sharply. And if the networks are less developed, places on radio towers will also be less in demand.

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