Vodafone plans IPO for towers business early 2021

The initial public offering (IPO) will see Vantage Towers, which has more than 68,000 towers across nine markets, spun off along with a deal to merge its Greek assets with Wind Hellas Telecommunications through a deal with its largest shareholder Crystal Almond.

Crystal Almond has agreed to acquire €100m of shares in the IPO at the IPO price, Vodafone said.

Vodafone will be Vantage Tower’s anchor tenant, providing initially 90% of its revenue. Other tenants would be added, the company said.

The new company will also include a 33.2% stake in INWIT, Vodafone’s joint venture with Telecom Italia and it could also add its 50% stake in UK masts company CTIL, a joint venture with Telefonica’s O2.

In a separate announcement, Vodafone said first-quarter organic service revenue fell 1.3%, with total revenue down 1.4% to £10.5bn.

Hargreaves Lansdown equity analyst William Ryder said the cash could be used to cut Vodafone's debt burden, higher after its €19bn takeover of Liberty Global’s European assets

"Overall we think the sale makes sense, and in the long run it should leave Vodafone more focused and agile. Trading has struggled a little under COVID-19, mainly because we’ve not been going on holiday and paying roaming charges so much," he said.

"This is the sort of impact that should unwind once people start taking trips again. It could be some time before roaming revenue fully recovers, especially if we face a sustained recession, but in the long run we’re not overly concerned. We were also slightly worried about costs, but management still thinks it can make savings and deliver a healthy dose of free cash.”