Vodafone flogs towers to fund network expansion

Stuart Corner
Monday, 25 August 2008 06:09

IT Industry - Strategy

Vodafone Australia has sold 140 of its cellular network base station towers to Crown Castle in order to raise funds for the planned expansion of its 3G network to cover 96 percent of the population.

Andy Reeves, chief technology officer at Vodafone Australia, said: "it is commercially prudent for Vodafone to outsource the ownership and management of these facilities. Vodafone will continue to utilise each transmission site under a leasing arrangement with Crown Castle, and use the proceeds of the sale to reinvest in its national mobile broadband network upgrade." The towers are located across Australia, with a concentration in NSW, Victoria and Queensland.

The price was not disclosed. However Crown Castle bought 669 Vodafone towers in 2001 for $240m. That deal included a service and maintenance contract on the towers, which were leased back to Vodafone, and a the exclusive right to acquire from Vodafone any new towers it built over the next six years up to a total of 600 towers.

That deal followed the sale by Optus (then Cable & Wireless Optus) in 2000 of 700 towers to Crown Castle for $200m with a similar exclusive right to purchase. Deals such as this appear to be quite profitable for carriers: Optus said in 2000 that it expected to realise a profit of about $80m from that deal.

Crown Castle said the new deal with Vodafone "is the most significant tower purchase Crown Castle has undertaken in Australia since acquiring its platform of tower assets from Cable & Wireless Optus in 2000 and Vodafone in 2001, and increases [our] portfolio of assets by approximately 10 percent." It now claims to own, operate and manages approximately 1,600 wireless communication sites in Australia.