Veon has agreed to sell its mobile network towers in Russia to Service-Telecom for R70.65 billion (€816 million).
Service-Telecom is a well-known partner of Veon’s VimpelCom, which operates in Russia under the Beeline brand, and already provides the company with passive infrastructure across various regions in the country. According to Veon, the transaction involves the sale of 100% of National Tower Company (NTC), a subsidiary of Veon, which operates a portfolio of approximately 15,400 mobile network towers in Russia. All of the active mobile network infrastructure currently operated by VimpelCom and the majority of the rooftop towers will remain with the company.
Under the terms of the deal, VimpelCom and Service-Telecom have entered into a long-term master agreement regarding the provision of tower infrastructure services for an initial period of eight years, and multiple extensions of eight years at the discretion of VimpelCom. Both parties will additionally enter into a new build-to-suit programme comprising of up to 5,000 sites by 2029.
It adds that the master agreement provides a framework for a long-term strategic partnership with Service-Telecom to pursue investments in network roll-out and upgrade, and share the benefits from potential future infrastructure market consolidation in Russia. The agreement also provides Beeline with strict service commitments and protections enabling Beeline to place an even greater focus on ongoing strategic initiatives and improve the quality of mobile services for its customers.
The transaction is subject to customary regulatory approvals and closing is expected to take place in the fourth quarter of this year.
Commenting on the transaction, Kaan Terzioglu, Veon’s CEO, said: “Today’s transaction is a major step forward in realising the value of Veon’s infrastructure portfolio for our shareholders. 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”.
Service-Telecom CEO Nikolay Berdin added: “The agreement reached with Veon is a key achievement for Service-Telecom on its way to becoming a leading telecommunication infrastructure operator in Russia. With 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”.
