Telefónica has spun off certain global tower and undersea cable assets into a new company, Telxius, which could be listed. The previously reported plan has been seen as following the example of Telecom Italia towerco spin-off Inwit.
Telefónica (BME:TEF) has spun off certain global tower and undersea cable assets into a new company, Telxius. The unit will be headed by former Telefónica Brasil CFO Alberto Horcajo.
In a stock exchange filing, it said it was considering alternatives including a possible IPO.
The previously reported plan has been seen as following the example of Telecom Italia (BIT:TIT) towerco spin-off Inwit (BIT:INW). The Italian incumbent listed a 40% stake in the business in 2015, and is now entertaining offers for another 45%.
The Spanish spin-off could be worth up to €10bn (US$11.3bn), according to previous reports.
The objectives of the new company, “part of [Telefónica’s] optimisation strategy”, are “increasing the services provided to other operators, improving the return on capital invested and allowing Telxius to participate more actively in the growth opportunities that exist in the industry, including the possibility of incorporating third party assets,” the Spanish incumbent said.
The infrastructure assets which will initially comprise 15,000 towers in Spain and other countries, and 31,000km of submarine fibre optic cable, including SAM-1, a submarine cable that connects the United States with Central and South America, the company said.
Telefónica noted that it also manages a high capacity fibre optic cable network connecting more than 40 countries in Europe and the Americas, including the United States. The network carries more than 4.5Tbps of annual traffic and provides services to Telefónica Group as well as third parties including fixed and mobile operators, ISPs and content providers.
Over the coming months, a number of newly created companies, including the aforementioned assets, will be gradually integrated into Telxius.
Present in 21 countries with a customer base of over 327 million, Telefónica has a market cap of €44.5bn (US$50.4bn) and debt of some €50bn (US$56.6bn). It is hoping to reduce some of this by selling UK mobile business O2 to CK Hutchison-owned Three for £10.5bn (US$15.2bn), and has also stated interest in listing its Mexican business.
