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* German group's infrastructure unit runs 33,000 towers
* CEO: interested more in IPO or partnership than outright
sale
* Vodafone already plans to float towers business
* Spain's Cellnex emerges as European industry consolidator
By Isla Binnie and Douglas Busvine
BARCELONA, Nov 13 (Reuters) - Deutsche Telekom is
keen to float or find a partner for its mobile towers assets,
Chief Executive Tim Hoettges said on Wednesday, lavishing praise
on Spain's Cellnex for its role in developing the
telecoms infrastructure business.
Europe's largest telecoms group carved out its Deutsche
Funkturm towers unit years ago but, unlike its rival Vodafone
which plans to float its own towers unit, has yet to
take concrete steps to find a buyer or partner.
"We are open for discussions on making this asset
transparent. I'm ready for an IPO (initial public offering) or a
partnership. I'm not in the mood for just selling," Hoettges
told the Morgan Stanley European TMT Conference in Barcelona.
"It's not a European business yet - it should be a European
business," he added, describing Europe's biggest towers group
Cellnex as an industry "lighthouse".
Towers are attractive to investors because their predictable
revenue streams can support higher leverage, and as a result
potential returns.
For telcos, spinning off towers offers a route to achieving
a higher valuation on their physical assets at a time when they
are struggling to eke out revenue growth and pay for 5G network
upgrades.
"VERY GOOD RELATIONSHIP"
Asked about the overture from Hoettges, Barcelona-based
Cellnex CEO Tobias Martinez told Reuters: "We have a very good
relationship which has become one of trust during the years in
which we have been partners in Switzerland."
"I think that, as the Deutsche Telekom CEO indicated,
Deutsche Telekom is thinking more of a long-term partnership
model, someone to create value with, rather than a possible
simple buyer of their towers."
Deutsche Funkturm owns 33,000 masts in Germany and the
Netherlands. It reported double-digit growth in recurring rental
revenue and core profits in the third quarter.
Cellnex agreed to buy the telecoms division of Britain's
Arqiva for 2 billion pounds ($2.56 billion) in October, boosting
its portfolio to about 53,000 sites in Spain, France, Italy, the
Netherlands, Britain, Switzerland and Ireland.
The company has hiked capital twice this year, most recently
attracting storming investor support for a 2.5 billion-euro
($2.8 billion) fundraising package partly aimed at funding the
British deal.
Even after taking centre stage in phone towers this year,
Cellnex still has appetite for deals, Martinez told the Morgan
Stanley conference.
"We raised 2.5 billion euros in new equity which is a little
more than double what we did the first time, because we really
think there is the chance to invest up to 4 billion more on top
of Arqiva," he said.
($1 = 0.7815 pounds)
($1 = 0.9074 euros)
(Writing by Douglas Busvine; Editing by Emelia
Sithole-Matarise)
