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Vodafone and O2 Agree Deal to Monetise UK Mobile Mast Sites

Monday, January 11th, 2021 (8:48 am) - Score 11,616
vodafone mast and engineer

In an unsurprising development, mobile operators O2 (Telefonica) and Vodafone, which have a 50:50 network sharing agreement via Cornerstone (CTIL), have today moved to jointly commercialise their existing UK mast and tower sites as part of a new long-term Master Services Agreement (MSA).

The joint venture has been running since 2012 and manages the passive tower infrastructure for both operators. CTIL currently operates c.14,200 macro sites with a 2.0x tenancy ratio (including active sharing) and c.1,400 micro sites. The company also provides management services for the anchor tenants for a further c.5,100 third party sites where their active equipment is deployed.

The move to commercialise CTIL was widely expected as Vodafone have already monetised a substantial proportion of their European tower infrastructure via Vantage Towers. Today’s new agreement formalises that for the UK and will also see them transfer their 50% shareholding in Cornerstone to Vantage Towers.

The new agreement will thus give each company the opportunity to monetise their assets, with initial terms of 8 years, with three additional 8-year renewal periods. The idea is that this shouldn’t “materially impact existing network agreements” and CTIL will continue to primarily serve its shareholders (i.e. they’re the preferred supplier of new sites for both operators), as well as some third parties.

Mark Evans, CEO of Telefónica UK, said:

“This is an exciting announcement in our ongoing drive to provide world class connectivity to our customers. The new agreement will allow us to deliver value for our business while investing in our network infrastructure.”

Vivek Badrinath, Vantage Towers CEO, said:

“Cornerstone is a great addition to the Vantage Towers portfolio. Cornerstone is exactly the type of high quality grid we like to own: a number one market position, and two strong anchor tenants with network sharing agreements in place for whom we are the preferred supplier. We look forward to working with our anchor tenants to power the UK’s digital transformation, enabling the roll-out of 5G networks to benefit business and consumers and ensuring greater mobile coverage for all.”

The move could help to raise additional funding for the on-going rollout of gigabit-capable 5G based mobile broadband networks, which is expected to take several more years to complete. In keeping with that, both O2 and Vodafone UK have agreed to commit as anchor tenants on c.1,200 new macro sites to be constructed by Cornerstone and c.1,950 new passive tenancies on existing macro sites operated by Cornerstone (total capital expenditure of approximately £130m).

Last November also saw CK Hutchison Holdings, which is the parent of mobile network operator Three UK, agree to sell interests in its European tower assets (including the UK, Austria, Denmark, Ireland, Italy and Sweden) and businesses to Spanish company Cellnex for £9bn (here).

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
6 Responses
  1. Avatar Buggerlugz says:

    So is this selling their mast infrastructure to someone else (with some form of leasing agreement), or enabling them to lease out space on their existing masts to other carriers?

  2. Avatar Name says:

    How to get all Huawei equipment replaced and earn money on it.

  3. Avatar James says:

    Well done .

  4. Avatar Ex Vodafone employee says:

    Huawei technology for Vodafone was only introduced in the Scottish area so Vodafone customers down south use Nokia and Ericsson equipment.
    This basically explains that the mutual expansion between 02 and Vodafone is getting bigger and is part of the reaching 99% 3G and 4G coverage UK wide whilst the negotiations for purchasing the 5G bandwidth is still ongoing.

    Vodafone used to have their network run by Ericsson until they decided to take back control and run the network themselves rather than outsourcing. The equipment and building of new macro and micro sites is indeed outsourced.

  5. Avatar Mark says:

    “This is an exciting announcement in our ongoing drive to provide world class connectivity to our customers. The new agreement will allow us to deliver value for our business while investing in our network infrastructure.”
    Of course, that’s why we’re still on 2G only masts inches area. It is 2021!

  6. Avatar Mac Mac says:

    Because they do this already in Bristol, us O2 customers have terrible 4g, and next to no 5g.

    For this to be the deal for the rest of the country is really bad news for us on O2.

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