Vodafone and Telefonica commercialise towers joint venture

Vodafone and Telefonica have announced the commercialisation of the joint venture that manages their UK passive tower infrastructure.

Cornerstone Telecommunications Infrastructure will be a preferred supplier of new sites for both operators after they signed long-term master services agreements with the tower operator. Vodafone said it would transfer its 50% stake in Cornerstone to its Vantage Towers infrastructure business in January.

Vodafone said the deal would create the number one infrastructure company in the UK operating about 14,200 macro sites and 1,400 micro sites. Vantage Towers will have 82,000 macro sites and will operate in 10 European markets with leading positions in nine, it added.

Cornerstone's 2020 earnings after leases were £111m meaning the deal will add €62m to Vantage Towers' earnings based on its 50% stake. Cornerstone has made commitments to build about 1,200 new macro sites by 2025 and 1,950 new passive tenancies on existing sites by 2024.

Vivek Badrinath, Vantage Towers' chief executive, said: "Cornerstone is exactly the type of high quality grid we like to own: a number one market position, and two strong anchor tenants with network sharing agreements in place for whom we are the preferred supplier. We look forward to working with our anchor tenants to power the UK's digital transformation, enabling the roll-out of 5G networks to benefit business and consumers."

The master service agreements have initial terms of eight years with three eight-year renewal periods. Cornerstone is a critical infrastructure provider to mobile network operators with a combined market share of 53%.

Vodafone shares rose 0.7% to 129.35p at 09:53 GMT.