Debt reduction: Telefónica to slim down by 31,000 radio masts

With the sale of over 31,000 radio masts in Spain, Germany and South America, Telefónica has taken a decisive step towards reducing its debt burden. The Spanish telecommunications giant announced that the sale to the American Tower Corporation (ATC) brought in around 7.7 billion euros, contributing to the repayment of around 4.6 billion euros in debt. The company anticipates a profit of around 3.5 billion euros. Telefónica’s shares, which had suffered from decades of debt of over 37 billion euros, reacted positively: they rose by around 10 percent and reached a price of 3.959 euros.

5G expansion through the sale of radio towers?

The sale of radio towers has long been a strategic means of promoting the growth of telecommunications groups. Telefónica Deutschland already sold a large number of its towers to Telxius in summer 2021, and in previous years 2,350 towers went to the same company for around 590 million euros. Such sales improve the balance sheet of the groups and create urgently needed capital for network expansion, especially for the new generation of the 5G network. Radio towers are also an interesting investment opportunity for institutional investors as they promise stable returns – an increasingly attractive investment in times of low interest rates. Vodafone has also opted for this strategy with the planned IPO of its subsidiary Vantage Towers. With over 68,000 masts in nine countries, Vantage Towers is establishing itself as one of the major European infrastructure providers. Deutsche Telekom is also outsourcing its radio towers to a separate company, of which it is currently still the sole owner.

Are consumers disadvantaged by radio tower sales?

Experts assume that the sale of the cell towers will not result in any disadvantages for consumers. According to Bettina Deuscher, telecommunications analyst at LBBW Bank, mobile phone prices remain subject to EU and national regulation and are therefore stable regardless of the ownership situation. American Tower Corporation, which now owns over 225,000 towers worldwide, is a specialist provider that pursues a strategy of offering its infrastructure to various network operators simultaneously, thereby ensuring a high level of profitability. This makes ATC one of the leading infrastructure providers in the global telecommunications sector.