TowerXchange’s 2019 predictions for European towers

Change in European communications infrastructure is accelerating

Four years ago, there was no Cellnex, no INWIT, no Telxius in Europe. The value of tower sale and leaseback activity was just topping €1bn and towers were seen as a competitive advantage but also a massive cost base.

Since then, we’ve seen the development of a European tower industry which not only allows MNOs to release capital and stabilise opex through the sale of their assets to towercos (€3.7bn and counting to date) but which has become a complex ecosystem supporting tower entities of all kinds from MNO-captive to JV to independent.

2018 has seen the creation of two new towercos by Altice – SFR TowerCo and Towers of Portugal. We’ve seen innovators Digital Colony enter the market and clear indicators from MNOs that they are planning to do more with their towers. As we approach 2019, TowerXchange makes five key predictions for the European market for 2019:

1)     More carve outs are coming. Vodafone are carving out 58,000 European towers right now. Rumours that two more multi-national MNOs with a strong European footprint will follow suit are growing. Over 100,000 European towers could move from MNO hands into carve out towercos over the course of 2019.

2)     Cellnex to acquire more towers. Cellnex have a tested playbook, a significant warchest and a huge amount of expertise in the European market. With eyes on both SLB opportunities and towerco acquisitions, there’s no doubt that Cellex are evaluating every opportunity, both to consolidate their place in existing markets and to move into their targets markets.

3)     Focus on operational excellence. As the European tower landscape diversifies, the smart portfolio owners are ensuring their offering stands out. Increased competition is also squeezing margins, and tower owners have to think smarter in terms of managing their operations and building networks to deliver outstanding service while competing on price.

4)     5G will drive new partnerships. We’ve seen plenty of it in 2018 already. Although 5G is still a distant horizon for most of Europe, the market leaders are lining up partners with whom they can work flexibly to develop mutually beneficial offerings as customer needs change. In 2018 we saw Axion partner with both Wireless Infrastructure Group and Enagas, Arqiva join forces with CityFibre and Cellnex (and many others) inking more deals with venues and local government to ensure access to critical street infrastructure.

5)     New players will enter the market. Not just the towercos carved out by MNOs but towercos with global reach will be looking to enter or expand their European footprint, and we may see players in adjacent verticals looking to enter the tower market too. In a market where KKR have become the de facto 3rd biggest towerco, it’s not hard to imagine how new players can quickly build momentum here.

With this in mind, TowerXchange is excited to bring you our 4th annual Meetup Europe– the only event in Europe which focusses on the development of the tower industry, and which will address these five key predictions as well as many more, with speakers already confirmed from Cellnex, Deutsche Telekom, INWIT, Russian Towers, Global Tower, EI Towers, Arqiva, Wireless Infrastructure Group and many more.

This year we’re also delighted to be able to offer you an early bird rate. It expires on 25th January, but why not book now and take something off your to do list for the new year? It will save you ￡250 on your usual registration fee.

Take a look at the event prospectus here, and drop me an email tofrose@towerxchange.com if you’d like to get involved with the event programme.