Cellnex Telecom, headquartered in Madrid, Spain, is the largest tower company in Europe with 112,737 operational sites across 12 countries, as of June 30. With actions taken in the first half of 2023, the company is bolstering that lead. Investments totaled $1.6 billion, mainly for Build-to-Suit deployments in several countries, and to acquire from French telecom operator, Iliad, the remaining 30 percent of On Tower Poland that Cellnex did not own.
Cellnex added 4,961 new points of presence (PoPs) to its sites, up seven percent YoY. That figure includes 2,741 from new colocations in existing sites, and the construction of 2,220 new BTS sites during this period. The average tenants/tower ratio across Cellnex’s portfolio at June 30 was 1.37, up from 1.35 a year ago.
Several key activities in 1H23 helped strengthen Cellnex’ position in its core markets. In France, Cellnex reinforced its existing partnership with telecom operator, SFR, to deploy new PoPs on both existing and new sites. The agreement with SFR has a 20-year service provision that commences from the date of each new PoP and all-or-nothing renewals. This agreement is expected to drive an investment of up to $300 million over a 6-year period.
With Bouygues Telecom, also in France, Cellnex will extend the fiber-to-the-tower installations through the joint Project Saint-Malo (Nexloop), initiated in 2020, until 2050, with five-year extensions beyond 2050. The agreement also includes building up to 65 new, so-called, metropolitan offices, that are designed to house edge data centers. Cellnex expects to make a similar $300 million investment over a 6-year period, under these agreements.
In Poland, Cellnex operates both passive and active infrastructure through On Tower Poland that manages and operates 8,500 sites for Polish mobile operator, Play. On Tower Poland will build around 3,400 new towers by 2030. Cellnex has a 20-year service provision contract with Play, extendible in successive 10-year periods.
Newly-appointed Cellnex CEO Marco Patuano expects the company to drive organic growth and streamline operations. “If you look at us across the group, we are a fairly diversified group across 12 different countries. In some countries, we are a pure towerco, in some other countries, we are a mixed towerco where we also make fiber, and in other countries, we provide active equipment like Poland,” Patuano commented in the company’s recent earnings call. “Our weakness is that we have 12 countries and 13 operating models. We can have more synergies if we standardize some of the things we do.”
The company has a backlog of 16,060 BTS sites to be constructed by 2030, bringing the total portfolio by then to nearly 129,000 sites. In addition, the company operates 8,541 DAS nodes and small cells along with 1,696 broadcast towers in various countries.
Consolidated revenues for 1H23 were $2.2 billion, up 17 percent compared to 1H22. Adjusted EBITDA grew to $1.6 billion, up 16 percent, reflecting both organic growth and the consolidation of the company’s geographic footprint. Free cash flow, while still negative, was $(141) million vs. $(803) million in 1H 2022, an 82 percent improvement. The company expects to be FCF positive by the end of 2023.
Cellnex reiterated its outlook for 2025 with revenue of $4.5-4.7 billion, EBITDA of $3.6-3.8 billion and recurring free cash flow of $2.2-2.4 billion.
By John Celentano, Inside Towers Business Editor
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