Telefónica hedges its bets on data centres

Telefónica has brokered a deal that will see it offload four more data centres but pick up a stake in the company acquiring them.

The Spain-based telco group is selling two data centres in its home market and two in Chile to investment firm Asterion Industrial Partners. In return it will take a 20% stake in Nabiax, the colocation and housing services business owned by Asterion, which already holds 11 data centres Telefónica sold two years ago.

The firms did not put a valuation on the deal and it is probably unwise to try to extrapolate a figure from that 2019 transaction, when Asterion paid €550 million for the aforementioned 11 data centres in Spain, the US and Latin America. The value of passive infrastructure assets is on the increase as telecoms operators look to monetise what they have and investors look to snap up assets that promise predictable, long-term returns.

The 2019 deal was all about monetisation for Telefónica, which has been on a quest to reduce debt for some years. The €550 million price tag gave Telefónica a capital gain of around €260 million, before taxes, it said at the time. This latest deal is a continuation of that, but it is also about keeping a seat at the data centre table.

“The agreement announced today allows Telefónica to crystallize the value of its infrastructure assets, while preserving intact Telefónica’s commercial positioning, client relationships and leadership in cloud, hosting and housing services provided to corporate customers,” the operator said, in a statement. The deal with Asterion includes a housing services element for the four akin to those inked two years ago, that is, with initial 10-year terms. Telefónica will retain its servers and its customer relationships, it was keen to point out.

“Additionally, through the 20% stake that Telefónica Infra will hold in Nabiax, Telefónica retains exposure to a global data centre platform with attractive growth prospects participating in the company’s value upside,” the added. Telefónica Infra manages the telco’s stakes in various infrastructure assets and vehicles, alongside financial investors. These currently comprise a 50.01% stake in towers company Telxius and 40% of German FTTH joint venture Unsere Grüne Glasfaser (UGG), but 25% of Brazilian FTTH provider FiBrasil is also set to join the fold.

Telecoms operators are increasingly realising that bringing in investment partners enables them to realise the growth potential of their passive assets, share the funding of the exploration of future opportunities, and at the same time generate cash from them, and this deal is a prime example of that.

“Nabiax and Telefónica will continue developing their existing commercial cooperation and will explore new joint business opportunities, such as new services, edge computing and data centre automation,” the companies said.

They did not share a timeframe for closing the deal, but said it will take place in two parts, one in Spain and the other in Chile.