KPN and Dutch pension fund ABP have entered into an agreement to form a new tower company, known as TowerCo. This partnership aligns with KPN’s ‘Connect, Activate & Grow’ strategy, aiming to optimise the value of its passive infrastructure assets while maintaining strategic flexibility.
The agreement comes in response to the surging consumption of data and the deployment of new technologies. With the growing demand for network expansion and densification, KPN recognises the strategic necessity of enhancing its exposure to Dutch passive telecom infrastructure.
TowerCo will manage the passive mobile infrastructure assets of KPN – along with those of NOVEC and OTC – the latter two being portfolio companies owned by TenneT and ABP, respectively. This consolidation will result in a portfolio of approximately 3,800 towers and rooftops across the Netherlands.
Additionally, KPN has committed to a built-to-suit agreement for the next decade. Under a long-term master service agreement, KPN will remain a tenant of TowerCo for an initial period of 20 years. TowerCo aims to boost tenancy levels by offering access to modernised towers and rooftops.
Enhancing flexibility and synergies
Through this transaction, KPN gains increased flexibility over a significant portion of its mobile sites, enabling synergies in the deployment, maintenance, and optimisation of network infrastructure. This flexibility is crucial for ensuring that KPN’s mobile network meets the high-performance standards required to deliver quality services to its subscribers, accommodate new technologies like 5G, and expand coverage into underserved areas.
The deal also allows for the harmonisation of contracts into a future-proof agreement covering around 60% of KPN’s tower and rooftop portfolio, with some existing lease terms being reset as part of the transaction.
ABP is represented by its asset manager APG. KPN will retain a 51% consolidating stake in TowerCo, with ABP holding the remaining 49%. As part of the deal, TenneT will sell its stake in NOVEC. KPN has agreed to an upfront cash payment of approximately €120 million to the current shareholders of NOVEC/OTC for their stake in the company and the amended lease terms, subject to closing adjustments.
On a pro forma, full-year basis, the consolidated impact of the transaction on KPN’s 2024 Adjusted EBITDA AL is projected to be around €30 million. Similarly, the impact on KPN’s Operating Free Cash Flow is expected to be approximately €20 million. Notably, the transaction will not affect employment and is subject to approval by the works council and regulatory authorities.
The formation of TowerCo is an important step in KPN’s strategic roadmap that promises enhanced infrastructure, greater flexibility, and improved financial performance, setting a strong foundation for future growth and technological advancement in the Netherlands.
(Image Credit: KPN)
See also: Committee warns UK set to miss 4G coverage target
Unified Communications is a two-day event taking place in California, London, and Amsterdam that delves into the future of workplace collaboration in a digital world. The comprehensive event is co-located with Digital Transformation Week, IoT Tech Expo, Edge Computing Expo, Intelligent Automation, AI & Big Data Expo, and Cyber Security & Cloud Expo.
Explore other upcoming enterprise technology events and webinars powered by TechForge here.
👇Follow more 👇
👉 bdphone.com
👉 ultraactivation.com
👉 trainingreferral.com
👉 shaplafood.com
👉 bangladeshi.help
👉 www.forexdhaka.com
👉 uncommunication.com
👉 ultra-sim.com
👉 forexdhaka.com
👉 ultrafxfund.com