Veon flogs its Russian towers for nearly $1 billion

Netherlands-based operator group Veon has joined the broader trend by selling its mobile towers in Russia to passive infrastructure specialist Service-Telecom.

While there is a strong precedent for operators raising cash by selling and then leasing back their towers, it’s novel to see a company other than Cellnex take the opportunity. Service-Telecom already manages a bunch of Veon’s (under the brand Beeline) passive infrastructure in much of Russia and reckons RUB70.65 billion is an acceptable price to pay to own it.

“Today’s transaction is a major step forward in realising the value of Veon’s infrastructure portfolio for our shareholders,” said Kaan Terzioglu, Veon’s CEO. “By entering into a long-term partnership with a strong, experienced counterparty in Russia, Beeline will enjoy the operational and financial flexibility to serve its customers with market-leading services through one of the nation’s largest and most technologically-advanced mobile networks. Moreover, this transaction allows to release the capital to deleverage Veon’s balance sheet and invest in critical aspects of active network and digital opportunities while achieving more financial flexibility.”

“The agreement reached with Veon is a key achievement for Service-Telecom on its way to becoming a leading telecommunication infrastructure operator in Russia,” said Service-Telecom CEO Nikolay Berdin. “With PJSC VimpelCom as our partner, we expect to drive sustainable long-term growth in Russia while constructing the infrastructure backbone of the digital economy and helping to enhance mobile broadband connectivity for consumers.”

The sale amounts to around 15,400 mobile network towers. All of the active mobile network infrastructure currently operated by Veon subsidiary PJSC VimpelCom and the majority of the rooftop towers will remain with the company. The resulting services agreement initially spans 8 years and both parties have vowed to build another 5,000 sites over that time.