Belgium will become the newest member of the independent towerco crowd after Telenet struck a deal to offload its passive infrastructure.

The buyer is US-based real estate investment trust (REIT) DigitalBridge. It has agreed to pay $820 million for Telenet’s footprint of 3,322 sites, which includes 2,158 owned sites and 1,164 third-party sites. The deal comes with the usual long-term lease agreement between buyer and seller. In this case, Telenet has secured a 15-year master lease agreement plus two 10-year renewals. DigitalBridge has also agreed to a build-to-suit clause that covers the deployment of an additional 475 new sites.

The deal – which will create the country’s first independent passive infrastructure provider – could not come at a more appropriate time for Telenet and DigitalBridge.

A hard-fought battle over Belgium’s strict rules on mobile radiation has for years held back the fully-fledged launch of 5G, restricting operators to small-scale deployments in a limited number of areas. These rules were finally relaxed late last year, paving the way for Belgium’s first 5G spectrum auction, which is due to take place in June. Last week the Belgian Institute for Postal Services and Telecommunications (BIPT) gave the green light to five bidders that want to participate.

Telenet agreeing to sell its towers for $820 million shores up its finances ahead of the auction, which might improve its odds of securing its preferred 5G spectrum. As for DigtalBridge, it gets in on the ground floor of Belgium’s nationwide 5G rollout.

“We see significant headroom for growth in the Belgian telecom market through the enhancement of mobile penetration and data usage, and we look forward to meeting and exceeding Telenet’s increased coverage needs,” said DigitalBridge CEO Marc Ganzi, in a statement late last week.

“Telenet’s tower business is a high-quality digital infrastructure asset with stable, predictable cash flows, high cash conversion, and long-term contracts,” he said. “This transaction is the latest example of DigitalBridge’s commitment to working with leading telecom and technology companies globally to help them unlock embedded value in their networks via creative solutions built on long-standing relationships and a proven track record of successfully operating assets,” he said.

Indeed, as a $45 billion REIT focused on digital infrastructure, DigitalBridge has its fingers in a growing number of pies. Recent examples include its AtlasEdge joint venture with Liberty Global, which late last year agreed to buy 12 of Colt’s European data centres, increasing its exposure to the growing market for localised, low-latency services. In the UK, DigitalBridge has combined multiple assets to form specialist mobile coverage provider Freshwave. Those assets are distributed antenna system (DAS) specialist StrattoOpencell, small cell solutions provider iWireless, and passive infrastructure firm Spyder Facilities. It positions Freshwave to serve operators looking for a cost-effective, targeted means of enhancing coverage and capacity.

These activities are all part of this broader trend of financial investors seeing an opportunity to capitalise on the clamour for connectivity by owning the underlying, tangible infrastructure. Telcos – particularly those in Europe – are only too keen to oblige as they seek to fund network deployment and the ongoing digital transformation of their operations.

March has been a particularly busy month in this regard. It began with TIM announcing plans to split off its networks and sell out of its towers business. That was followed by news from the UK, where the government approved Cellnex’s planned acquisition of 6,000 towers from CK Hutchison. A little over a week ago, Reuters reported that investment firms Brookfield and Global Infrastructure Partners made a $16 billion offer for a majority stake in Vodafone’s mast business Vantage Towers. In Germany meanwhile, fresh rumours, again from Reuters, claimed incumbent Deutsche Telekom has begun the process of selling its towers business for €18 billion. And finally, little further afield, privately-held Vodafone New Zealand was revealed this month to have hired advisors to help it offload its tower assets.

Naturally there will come a point when some of these private equity firms will want to book a return on their investments in passive infrastructure and will look for an exit. When that happens, the effect it may have on the long-term health of the market is – at this point in time – anyone’s guess.

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