Vodafone NZ readies sale of mobile towers

Infratil and Brookfield Asset Management-owned telco Vodafone New Zealand is looking at selling its mobile tower network, and has engaged Barrenjoey and UBS to advise on the potential sale.

The sale has been on the table since late last year. It could reportedly net in the vicinity of NZ$1 billion-plus (A$930 million).

Vodafone corporate affairs spokesperson Rich Llewellyn said the telco expects a buyer to enjoy NZ$51 million (A$47.5 million) in earnings from the tower network, before tax.

The sale would include 1487 physical towers with masts, poles, foundations, fencing and access facilities, along with any associated contractual rights to occupy site areas.

So-called passive assets do not include radio-frequency spectrum, core mobile or radio network, or the data backhaul circuits connected to sites.

A further 290 new cell sites with towers will be built by Vodafone, which will lease those and existing ones for 40 years following the sale.

It is a model that has also been seen elsewhere in Australia and New Zealand.

In February this year, incumbent telco Spark said it would transfer its own tower assets to a subsidiary called TowerCo so as to prepare for wholesaling of shared infrastructure.

Around 1500 sites around New Zealand with towers situated on them will be transferred to TowerCo, Spark chief executive Jolie Hodson announced.

“We can see globally that shared ownership models are an effective way of improving returns from infrastructure assets that are not critical to competitive advantage," Hodson said.

"In mobile, our active assets are what drives our competitiveness – including our core network and radio equipment.

"These assets leverage our spectrum holdings, provide differentiated customer experiences, and support our wireless aspirations."

In Australia, Telstra sold a 49 percent stake of its InfraCo Towers business in June last year, netting $2.8 billion in the process.

Competitor Optus followed suit in October 2021 and offloaded a 70 percent share of its Australia Tower Network subsidiary, for $1.9 billion.