Liberty Global reportedly looking at Belgian asset sale

The industry’s next towers deal could come in Belgium, where Liberty Global is reportedly mulling offloading passive infrastructure owned by its Telenet unit.

Unnamed sources cited by Bloomberg report that cable TV, broadband and mobile operator Telenet is working with Goldman Sachs on the divestment of around 3,000 telecoms towers.

Any resulting deal could be worth at least €600 million, they said, with private equity firms and strategic investors likely to be attracted to the sale. However, the newswire added the usual disclaimer to note that there is no guarantee that a sale will result from the current discussions.

Given how hot the market for telecoms towers has been in recent years, both in Europe and further afield, it seems highly likely that Telenet would consider monetising its tower assets. Indeed, there is probably not a telco in the world that hasn’t at least considered such a move.

However, the interesting thing about this story is the fact that we’re talking about a towers sale in Belgium, a country in which the mobile antennas market is more highly regulated than in many others.

When Orange made its ill-fated attempt to take sole control of Orange Belgium earlier this year, much of the argument against its planned buyout of minority shareholders from one vocal involved party centred on the valuation of the unit’s tower assets. To recap quickly, Polygon Global Partners, holder of a 5.29% stake in Orange Belgium, opposed the group’s €22-per-share buyout offer on the grounds that it did not reflect a fair value of the company in a number of areas, a key one being its towers portfolio. Orange had ascribed a value of zero to its Belgian towers, partly because it said it did not intend to sell them, but also because the structure of the Belgian market makes them worth less than they might be elsewhere.

“In Belgium, all operators benefit from the regulatory framework which provides for an obligation to share antenna sites at a regulated price since 2008,” Orange said, in April. “This regulation sets the Belgian towers market apart from other European markets.”

Clearly, Orange’s opinion on the value of its Belgian towers does not necessarily translate to the rest of the market, particularly when you consider what it was aiming to do – the Orange Belgium buyout failed, incidentally – but it raises questions over the amount Liberty Global might raise from the sale of the Telenet towers.

A quick back-of-the envelope calculation based on Bloomberg’s €600 million figure suggests that the towers are indeed worth less than other European portfolios…but not zero, obviously.

Both Cellnex’s €10 billion mega-buy of CK Hutchison’s towers across six European markets – five of the six portions of the deal have closed; the UK is still examining competition concerns – and Telefonica’s sale of its Telxius towers in Spain and Germany to American Tower come in at over 50% more on a per-site basis. Naturally, there are many variables to take into account, but those figures give us a broad idea of how those Belgian assets stack up.

The bottom line is, although telcos could make less from their towers in Belgium, should they choose to part with them, than they might elsewhere, there is still money to be made. The monetisation of passive infrastructure is alive and well in Belgium.