Telekom Austria’s two largest shareholders have agreed to a plan to separate out and float the telco’s mobile towers.

The Austrian incumbent, which operates as A1, on Tuesday disclosed that America Movil and ÖBAG – or Österreichische Beteiligungs AG, a state-owned investment fund – have given the green light to a plan that will see its mobile towers spun off, and listed in Vienna and distributed proportionally to its existing shareholders. The two parties hold 51% and 28.42% of the telco respectively, according to the information on its website.

“A decision about the spin-off is subject to all relevant corporate approvals,” Telekom Austria said in a short statement.

It did not give any further information on the project. However, ÖBAG had a little more to say.

“Preparations to implement the Tower agreement – while protecting shareholder rights – will start after approvals in the relevant bodies, including the supervisory board and AGM of Telekom Austria and the next supervisory board of ÖBAG,” the sovereign wealth fund said.

It explained that the deal will not change Telekom Austria’s core shareholder structure, noting that following the spin-off, current shareholders will then own shares in two separate stock corporations.

“The tower company will be managed independently, permitting it to take advantage of additional business and growth opportunities, benefiting stakeholders as tower duplications and costs for expansion will be reduced,” it said. Which is pretty much the rationale for any towers deal. And there have been plenty to date.

Indeed, it has been clear for some time that a towers spin-off was pretty high on the agenda for Telekom Austria. The presentation from the operator’s most recent AGM in late June includes a couple of slides on the subject that are clearly designed to persuade investors that a spin off would be the right course of action, in no small part because everyone else is doing it. At the time, the company insisted that it had “not made a decision yet,” but it took great pains to point out that its major rivals have already made the move, as well as reassuring its audience that it was talking about passive infrastructure only.

The industry watched with interest last summer when Deutsche Telekom, which operates as Magenta Telekom in Austria, finally announced the sale of 51% of its GD Towers business, comprising 40,000 sites in Germany and Austria, to DigitalBridge and Brookfield in a deal that valued the whole asset at €17.5 billion. Around 7,000 of those towers are located in Austria, or just under one fifth, but it’s difficult to make any comment on valuation based on the information available, given the differences between the two markets.

Meanwhile, Cellnex closed the acquisition of 4,500 Austrian towers from CK Hutchison in early 2021 as part of its €10 billion pan-European towers mega-deal, but did not split out costs on a market-by-market basis.

So we’ll just have to wait and see on the subject of valuation. And it’s not wholly clear how long that wait might be, given that none of the parties involved have given any sort of comment on how lengthy the full approvals process might be.

However, this formal approval from Telekom Austria’s shareholders is kicking into life a scheme that has been a long time coming.

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