Cellnex and Bouygues Telecom seal fiber deal to support 5G | Light Reading

26 Feb Cellnex and Bouygues Telecom seal fiber deal to support 5G | Light Reading

Cellnex Telecom is strengthening its partnership with Bouygues Telecom by forming a new joint venture company that will deploy a national fiber optic network with a particular focus on supporting the rollout of 5G in France.

The new company will be 51% owned by Cellnex and 49% by its French partner, with Cellnex holding 100% of the economic rights. Cellnex aims to invest 1 billion (US$1.08 billion) by 2027 on the rollout of a 31,500km network, which will interconnect towers, sites and “edge computing centers” of an unspecified nature.

Bouygues Telecom will be the anchor tenant under a 30-year contract with a five-year extension, and is expected to account for more than 80% of the new company’s revenues. The new French venture is ultimately expected to generate EBITDA (earnings before interest, tax, depreciation and amortization) of 80 million, and Cellnex said its backlog of future sales contracted will grow by 4 billion ($4.32 billion) to total 44 billion ($47.52 billion).

Indeed, the move to add more assets in France continues an M&A-fueled expansion drive that has seen Cellnex become Europe’s hottest mobile infrastructure neutral host, operating a portfolio of about 58,000 sites (including forecast rollouts up to 2027) in Spain, Italy, the Netherlands, France, Switzerland, the UK, Ireland and Portugal. In France, Cellnex said it will manage almost 14,000 sites by 2027 once all of its agreements have been realized, including 5,000 towers for Bouygues Telecom.

In 2019, this expansion strategy helped boost revenue by 15% to exceed 1 billion for the first time, with EBITDA rising by 16% to 686 million ($746 million). Cellnex still posted a loss of 9 million ($9.77 million) last year, but for 2020 it is forecasting EBITDA of 1.065 billion ($1.157 billion) to 1.085 billion ($1.178 billion) and recurring free cash flow growth of more than 50%.

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Anne Morris, Contributing Editor, Light Reading