Deutsche Telekom suggests upcoming towers partnership

Deutsche Telekom suggests upcoming towers partnership (1)

“Because everybody does something, this is exactly why I’m not doing it,” Tim Hoettges, Chief Executive Officer of Deutsche Telekom said, referring to the current trend of telecoms operators selling off tower assets for sizeable sums of money. “It might be right that you have to monetise your towers to deleverage your balance sheet… [but] we don’t need that today,” he said.

Deutsche Telekom will not part with its tower assets, despite recently reaching` a deal of that nature in the Netherlands, but it could look to float its passive infrastructure business or seek out a tower partnership.

Orange CEO Stéphane Richard recently named Deutsche Telekom as an ideal partner in the towers space; while the telco wants to retain control of its own towers, that could mean co-control with another big operator, Richard explained.

There were no formal talks happening with Deutsche Telekom – or Vodafone, Orange’s other perfect partner – when the CEO made the revelation.

Deustche Telekom appears to be following a similar strategy to Orange.

“It always takes two to tango,” said Hoettges, speaking at the German incumbent’s 2020 results call on Friday. “We might have a partner, where we have synergies and a value-enhancing story,” he said, a comment that doubtless caught the attention of executives at the operator’s French peer.

Passive infrastructure assets

Telefonica is one of the big names selling off towers, and it was honest about the fact that debt reduction was one of the main drivers of the €7.7 billion deal it inked with American Tower in January.

But for Deutsche Telekom, towers and their growing value are a strategic asset, “not just selling something and getting the money,” as Hoettges put it.

The operator brokered a deal for towers partnership in January, to combine its towers in the Netherlands with those of Cellnex and simultaneously create a fund in partnership with the towers firm to invest in passive infrastructure assets.

“This is a classic DT deal. We create optionalities for value-enhancing businesses outside…of our strategic envelope,” he said.

Benefits of towers partnership

As for the benefits that comes out of sharing networks, they include: the increase in the speed of opening new fields and enables the subscribers to provide network coverage to wide areas in a faster way with lower CapEx potential.

Operators also have chance to satisfy their customers with the quicker network coverage, as well as operators will start making money as of the first day by removing the field installing process.