With the sale of 31,000 cell towers in Spain, Germany and South America, Spanish telephone giant Telefónica is making good progress in reducing its debt. Telefónica announced that the sale to ATC (American Tower Corporation) will raise EUR 7.7 billion.

This should enable debt to be reduced by 4.6 billion euros and a profit of around 3.5 billion is expected. While Telefónica shares have suffered for years from a mountain of debt of around 37 billion euros, investors are now much more pleased: The share price rose by 10 percent to 3.959 euros.


5G expansion through sale of radio towers?

The sale of radio towers is common practice in the industry: Telefónica’s German subsidiary sold radio towers to Telxius last summer. A few years earlier, 2350 masts were handed over to Telxius for the sum of 590 million euros.

However, these sales can not only take pressure off the balance sheets of the telephone groups, but also provide fresh money for investments in network expansion – including the new, faster 5G network. In addition, radio towers are an interesting investment for professional investors: they provide a relatively stable return. The current low interest rates make this investment additionally attractive.

Meanwhile, Telefónica’s competitor Vodafone is seeking an IPO with its radio tower subsidiary Vantage Towers. Vantage Towers currently has approximately 68,000 towers in nine countries. Several years ago, Deutsche Telekom outsourced its radio towers to a separate company, where it is still the sole owner.


Are there any disadvantages for the consumer?

If experts have their way, consumers will not suffer any disadvantages as a result of the sales of transmission towers. “Mobile prices are subject to EU and national regulation,” reassures LBBW Bank telecom analyst Bettina Deuscher.

As a specialized provider, American Tower Corporation can offer its radio towers to several network operators and thus more easily generate profits. ATC currently has more than 183,000 masts, making it one of the largest telecommunications infrastructure providers in the world.