Vodafone and Telefonica commercialise towers joint venture

Torre de telecomunicaciones de Vodafone en AlemaniaVODAFONE- Archivo

Torre de telecomunicaciones de Vodafone en AlemaniaVODAFONE- Archivo

Vodafone said it would put its 50% stake in Cornerstone, its United Kingdom towers joint venture with Telefonica, into its new European infrastructure unit Vantage Towers after reaching a new commercial agreement with the Spanish company.

Corner is the biggest passive infrastructure operating company in the United Kingdom with about 14,200 macro sites and approximately 1,400 micro sites.

The Newbury, England-based telecommunications company noted it established Cornerstone in 2012 with Slough, England-based Telefonica UK, part of Spain's Telefonica SA, to create and manage a single network of passive infrastructure contributed by both mobile network operators.

Additionally, Vodafone UK said it plans to transfer its 50% holding in Cornerstone into its European infrastructure unit Vantage Towers this month. The addition of the 50% shareholding in Cornerstone extends Vantage Towers' portfolio to about 82,000 macro sites and its geographic presence in Europe to 10 markets, with leading positions in nine of them.

Vodafone and O2 have also each entered into a long-term Master Services Agreement (MSA) with Cornerstone for eight years, which makes it the preferred supplier of new tower sites for the two MNOs from the start of this month with three eight-year renewal periods.

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Vodafone's stake would add €62 million (£56 million) to Vantage's 2020 financial EBITDA after Leases, the operator said.

That will naturally have a knock-on effect on Vantage Towers' forthcoming IPO.

"Given the quality and reach of its infrastructure, Cornerstone is well placed to capture a significant portion of the additional market tenancies required for densification and coverage in the UK", Vodafone said, in a statement.

Shares in Vodafone were up 0.2% at 128.69 pence in London early Monday, while shares in Telefonica were down 0.2% at EUR3.56 in Madrid.

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