Telekom sells majority stake in radio tower business in billion

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Telekom logo on the corporate headquarters in Bonn

Photo: Andreas Rentz / Getty Images

Deutsche Telekom is selling the majority of its cell tower business to two North American investors in a multi-billion dollar transaction.

The Canadian Brookfield Asset Management and DigitalBridge from the US state of Florida, a specialist for digital infrastructure, are taking over 51 percent of the shares in the division at a total valuation of around 17.5 billion euros, Deutsche Telekom announced.

The rest will remain with Telekom.

According to its own statements, cash amounting to around 10.7 billion euros will flow into the coffers.

"We make the value of our radio tower business visible and thus create value for our shareholders," said Telekom boss Tim Höttges.

The transaction will reduce Deutsche Telekom's financial debt by EUR 10.7 billion, it said.

The Bonn group now wants to further apologize and accelerate the path towards the targeted majority stake of 50.1 percent in the US subsidiary T-Mobile US.

Telekom is copying Vodafone and Telefonica

With around 800 employees, the radio tower subsidiary GD Towers operates more than 40,000 locations in Germany and Austria.

According to Telekom, the company generated sales of around 1.1 billion euros in 2021, and adjusted operating income was around 640 million euros.

There has been a lot of dynamism in the radio tower industry for some time, also because the 5G network build-out and increasing digitization are creating high demand.

Infrastructure providers can rent the masts on the ground and on house roofs to several users at the same time more easily than mobile phone companies, which promises recurring income and plannable investments for years to come.

That's why corporations like Vodafone and Telefonica spun off or sold their radio towers some time ago.