Vodafone NZ celltowers could be up for sale as Infratil weighs ‘capital release’ options

Vodafone NZ’s cell towers are said to be on the block.

NZX-listed Infratil and Canada’s Brookfield, who each have a half share in the telco, have hired Barrenjoey Capital Partners to manage the sale, according to a report in The Australian.

The move comes after Infratil told investors at its results briefing earlier this month that “Vodafone continues to explore the possibility of further infrastructure-sharing arrangements and network capital release options”.

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It also follows two deals across the Tasman that have made cell site networks a hot property.

In October, Optus said it had sold a 70 per cent stake of its fully owned cell tower subsidiary to AustralianSuper (the new co-owner of Vocus) in a A$1.9 billion ($1.92) deal that valued the 2312-site network at $A2.3b.

And earlier, in June, Telstra sold 49 per cent of its telecommunications towers business, InfraCo Towers – which has around 5570 sites – to a consortium for A$2.8b.

The consortium included the Australian government’s Future Fund, plus two private superannuation funds – one of whom, Sunsuper, is managed by Morrison & Co, which also manages Infratil.

Vodafone NZ has some 1550 mobile sites, according to an Infratil investor presentation.

Infratil’s interest in exploring cell tower options dates back to May 2019, when the infrastructure company combined with Brookfield to buy Vodafone NZ in a $3.4b deal (each chipped in $1.03b, with the balance covered by debt).

Then Infratil CEO Marko Bogoievski told analysts two days after the sale went through that there was scope to rationalise investment in mobile telecommunications infrastructure.

“I think our regulators understand that. I think our politicians understand that. I think our customers get that,” he said.

“I think we’ve got a role to play in helping people get their heads around those sorts of ideas.”

Vodafone NZ, Spark and 2degrees already share infrastructure in rural areas under their Rural Connectivity Group joint-venture, which was formed to (successfully) bid for work for the second stage of the public-private Rural Broadband Initiative (RBI).

At its results briefing earlier this month, Infratil said: “Network sharing is proving particularly necessary to improve rural connectivity, and telecommunications companies are working to bring this about while preserving the benefits of competition.”

Vodafone NZ’s operating earnings improved 12 per cent to $252 million for the 12 months to September 20, Infratil said.

“Vodafone’s cost-out programme and efficiency gains have contributed to improved ebitda,” the company told investors.

Overall, Infratil said: “The dividend outlook is for modest continued growth, reflecting expected growth in operating earnings from CDC Data Centres and Vodafone and the addition of Qscan and Pacific Radiology to the Group.”

Infratil shares closed on Friday at $8.07.

The stock is up 44.11 per cent for the year.

The company’s manager, Morrison & Co, has been asked for comment.

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