Cellnex Leads European TowerCos

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Cellnex Telecom (CLNX.SM), the Barcelona, Spain-based tower company, has grown dramatically through mergers and acquisitions, and build-to-suit (BTS) programs since establishing itself as an independent towerco in 2015. With a series of announced deals in the pipeline and significant BTS activity planned in conjunction with these deals, the company expects to have over 130,000 sites across 12 countries in its operating portfolio by 2030.

At this juncture, that tally ranks Cellnex as the leading independent tower company in Europe ahead of Vodafone’s Vantage Towers, headquartered in Germany and U.S.-based American Tower. At the end of 2Q21, Cellnex had a total of over 86,700 telecommunications towers, broadcasting towers and distributed antenna systems (DAS) installations. By comparison, Vantage Towers owns 45,600 and co-controls 36,300 sites across 10 countries. American Tower, with its recent Telxius Towers acquisition, as Inside Towers reported, is growing in Europe with over 25,000 towers in four major countries.  

Note that a high proportion of European towers, by some estimates over 70 percent, are still owned by the mobile network operators. That scenario is changing as the MNOs realize the value of those assets and increasingly, are receiving proposals from independent towercos and infrastructure investment firms to sell those assets.

At the same time, tower tenancies are lower compared to the U.S. market because the European MNOs tend not to market space on their towers, especially to competitors. Cellnex tenancies averaged 1.36 tenants per tower at the end of 1H21. The company’s goal is to reach over 1.5 tenants per tower by 2025.

1H21 Performance and Outlook

For the first half of 2021, Cellnex reported revenues of $1.24 billion* (€1.06 billion), up 47 percent from $845 million in 1H20. The company attributed the 63 percent year-over-year increase in its Telecom Infrastructure Services revenues that generated almost $1.1 billion or 85 percent of the total, mainly due to organic growth, BTS programs and acquisitions. Compared to the same period in 2020, Adjusted EBITDA for 1H21 was $939 million, up 53 percent while operating profit increased 11 percent to $90 million.

With positive results to date, Cellnex raised its 2025 guidance indicating it expects to achieve revenues of $4.8-5.0 billion, Adjusted EBITDA of $3.9-4.1 billion and Free Cash Flow of $2.3-2.6 billion.

At the end of 1H21, Cellnex reported an aggregate of 80,000 towers that it owned and operated along with 1,700 broadcast towers in Spain and 4,000 DAS installations in major cities in Spain and Italy. 

Another 24,000 towers are in the M&A pipeline with those deals expected to close through the end of 2021 and into early 2022. At the same time, the company has BTS commitments with its MNO tenants for over 20,000 towers through 2030 at an estimated capital expenditure of $8 billion.

Company Evolution

Cellnex’ story is one of long-term vision while aggressively executing on strategic near-term opportunities.

Starting out in 2000 as Abertis Telecom (AT), the small Spanish company bought its way into the audiovisual and land mobile radio-communications business. In 2002, AT undertook the development of digital terrestrial television (DTT) service and by 2010, its DTT services covered 98 percent of Spain. Earlier in 2007, the company invested in Eutelsat, the European satellite company, as its first foray into telecommunications

AT purchased in 2012 from Telefónica Spain, 1,000 telecommunications towers, giving the company a foundation for growth as a passive infrastructure operator.

Expanding its position in Spain, AT in 2013 purchased up to 1,975 towers from MNOs, Telefónica and Yoigo.

Expanding outside of Spain, AT bought TowerCo, the telecommunications operator that manages the Italian motorway network. That opened other opportunities in Italy. In 2015, AT purchased 7,377 towers and sites from mobile operator WIND to become the leading independent telecommunications infrastructure operator in Europe.

By May 2015, AT rebranded itself as Cellnex Telecom to become a public company listed on the Madrid Stock Exchange. 

Today, Cellnex’  business is structured in four major areas: telecommunications infrastructure services, audiovisual broadcasting networks, security and emergency service networks, and solutions for smart urban infrastructure and services management.

Several acquisitions were pivotal to Cellnex’ rapid rise. In 2017, Cellnex signed an agreement to acquire Swiss Towers’ 2,239 sites in Switzerland and 3,000 sites from Bouygues Telecom in France.

It’s biggest transnational deal in 2019 transformed the company. Cellnex announced a Europe-wide agreement with French MNO Iliad, in France and Italy, and with Salt in Switzerland to add 10,700 sites (5,700 in France, 2,200 in Italy and 2,800 in Switzerland) to its portfolio.

The company continued its M&A activities throughout 2020 announcing a major agreement with CK Hutchison to acquire CKH’s European portfolio of 24,600 sites in six countries, for nearly $12 billion. In addition, Cellnex acquired Iliad’s network of 7,000 sites of the mobile operator Play in Poland.

To date, Cellnex reached an agreement with Cyfrowy Polsat in Poland to acquire 99.99 percent of its telecommunications infrastructure subsidiary Polkomtel Infrastruktura.

Cellnex also is acquiring from French operator SFR about 10,500 sites in France and reached an agreement with Deutsche Telekom to buy T-Mobile Infra BV’s 3,150 sites in the Netherlands.

*All figures in $U.S.

By John Celentano, Inside Towers Business Editor

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