Media & Telecom

Deutsche Telekom, Cellnex combine Dutch cell phone tower businesses

2 minute read

Brochures with the logo of Deutsche Telekom AG are pictured at the shop in the headquarters of German telecommunications giant in Bonn, Germany, February 19, 2019. REUTERS/Wolfgang Rattay

Register now for FREE unlimited access to reuters.com

BERLIN, Jan 21 (Reuters) - German telecoms group Deutsche Telekom (DTEGn.DE) and Spanish cell phone mast operator Cellnex (CLNX.MC) said on Thursday they would combine their tower business in the Netherlands and set up a joint fund to invest in digital infrastructure.

Once the deal closes, Cellnex Netherlands will operate 4,314 sites, including 180 new ones which will be built over the next seven years. Cellnex will own 62% of the new entity, while Deutsche Telekom will hold 38% through the fund.

The companies will become anchor investors in a newly established Digital Infrastructure Vehicle (DIV), an investment fund focused on European digital infrastructure. Deutsche Telekom will transfer its T-Mobile Infra business to the fund, they said.

Register now for FREE unlimited access to reuters.com

Deutsche Telekom will receive a 250 million euro ($303 million) cash payment and a shareholding in DIV, they added in the statement. This translates into a capital commitment of Deutsche Telekom of around 400 million euros to the fund.

Cellnex also agreed to commit 200 million euros of capital to DIV, they said.

Telecoms towers are increasingly prized by investors navigating a world of low returns thanks to their steady, inflation-linked cash flows and prospects for more development as next-generation 5G internet expands.

More connections will be needed to link up billions of devices in an "Internet of Things", likely ensuring continued investment in the sector.

($1 = 0.8247 euros)

Register now for FREE unlimited access to reuters.com
Reporting by Thomas Seythal; Editing by Maria Sheahan

Our Standards: The Thomson Reuters Trust Principles.

More from Reuters