Surging Data Flows and the Promotion of Merged Capital-
As Europe's mobile infrastructure gradually separates from the telecommunications industry that built it, the value of cost-cutting intensive networks is expanding.
Companies operating antenna poles rent most of their money to mobile service providers, creating a real estate return because contracts tend to last for many years.
Low interest rates have boosted Telecom Tower companies'valuations, but their growth prospects depend in part on whether more operators are willing to sell their masts so that their new owners can make them more efficient and profitable.
How long this will take place is uncertain.
Given that there are four in the United States-
Barclays said that one in five telecom operators are in the hands of independent companies, and about 75% of European telecom operators still own these operators.
This has begun to change, giving mast owners such as Inwit in Italy and Carlnex Telecom in Spain the opportunity to expand their portfolios and integrate multiple networks into a single mast, increasing capital returns while clearing the skyline of unsightly poles and transmitters.
Oscar Cicchetti, chief executive of Inwit, told Reuters: "Mobile operators are facing the nightmare of how to monetize data traffic growth, so they will increasingly be willing to outsource infrastructure to reduce costs. "
Number of operators using a single mast-are 1. 6 to 1.
9 In Europe, compared with 2-3 in the United States, industry data show.
Inwit and Cellnex were separated and listed last year by Telecom Italia of Italy and Abertis of Spain, respectively, and are now seeking to expand their business scope.
Cellnex has been buying MAST portfolios across Europe and has recently expanded in the Netherlands and France.
Analysts said the financial pressures faced by Portuguese, French and Spanish telecommunications companies could lead to further sales.
At present, Inwit is focusing on domestic integration in Italy, where it sees greater room for cost reduction and growth.
Three Italian companies owned by CK Hutchison Holding and Wind Telecommunicazioni, owned by Vimpelcom, are about to merge, and Iliad, France, as the fourth Italian mobile operator, is entering Italy to alleviate EU anti-monopoly concerns, which could lead to the sale of masts and become In. New customers for wit or Cellnex.
"The footprints of European towers are in a mess. . .
Giles Thorne, an analyst at Jeffries, said: "Infrastructure is very inefficient. "
"This process will be reversed, but（
Mobile Network Operators)
Very sensitive to change.
"Mast is betting on increased usage of new customers, including wireless local loop providers and agencies such as police and fire brigades, which are turning to broadband networks.
They also saw the development of the Internet of Things. （IoT)
Everything from airplanes to hair dryers is increasingly connected to the Internet and controlled remotely.
It is estimated that the traffic volume of the Internet of Things will increase by more than 40% annually in the period of 2015. -
According to Cisco, 2020.
Another untapped opportunity is small batteries, which can be connected to traffic lights or lamp posts, allowing operators to expand and enhance coverage without requiring additional masts.
Last month, the Italian government stepped up its efforts to deploy small cells in Italy in an attempt to follow the example of the United States. S. -
Headquartered in Crown Castle, the technology has become an important source of profit in just a few years.
In June, Cellnex acquired commscon, an Italian company that uses small batteries to provide high coverage. -
Transportation sectors such as airports, hospitals and stadiums have indicated that the technology is expected to become "the main driving force for the telecommunications infrastructure industry in the next few years".
The core profit margins of Inwit and Cellnex are about 30% to 40%, compared with about 60% in the United States. S.
Peers, this gap may gradually narrow as companies renegotiate site rental costs and increase tenants.
But this largely depends on how urgently mobile service providers need to sell their fixed assets to support tight financial conditions, and create value by addressing overlapping coverage issues, bringing the required geographic scale to the tower company.
At present, some telecom operators prefer to establish joint ventures with their competitors rather than sell infrastructure directly and retain some control rights, which will be a crucial industry shift from 4G to 5G and its more intensive network.
Macquarie analysts said: "In the near future, only mobile network operators with greater financial difficulties will continue to divest tower assets, because the strategic benefits of tower ownership outweigh potential balance sheet improvements. "