With 2024 now well and truly underway, we take a look at some of the top trends that GlobalComms subscribers can expect to see a lot more of this year.
The Rise of the Fiber Wholesale Provider
As cost-conscious telcos around the world seek to free up funds to continue their fiber-to-the-home (FTTH) network rollouts, the fiber wholesale business model is increasingly coming into play.
In Latin America, Telefonica is a driving force behind this business model. The group entered into fiber-centric tie-ups with investors in Brazil, Chile, Colombia, and Peru, selling strategic stakes to Caisse de depot et placement du Quebec (CDPQ) and KKR to bankroll future fiber activity.
Cash-strapped Brazilian telco Oi spun off—and then sold off a strategic stake in—its fiber unit, which is now known as V.tal. The latter company’s networks now pass 22 million homes with FTTH technology.
Outside of Latin America, Telefonica entered into a number of fiber-optic joint ventures (JVs), namely: Bluevia in Spain, Unsere Grüne Glasfaser in Germany, and UK-based nexfibre.
Indeed, Europe proves to be a particular hotbed of fiber JVs, with telcos embarking on tie-ups with deep-pocketed investors in most major markets.
Tower Power: Monetizing Mobile Masts
One of the biggest telecom deals of 2024 to date involves a tower sale in India.
In January, Data Infrastructure Trust (DIT)—an infrastructure investment trust sponsored by an affiliate of Canada’s Brookfield Asset Management—signed a definitive agreement with American Tower Corporation (ATC) to acquire 100% of the equity interests in American Tower’s operations in India (ATC India).
ATC India currently presides over a 76,402-strong tower portfolio. The total cash proceeds owed to American Tower at closing (subject to certain pre-closing terms) could reach INR210 billion ($2.52 billion). Presently, DIT houses Brookfield’s telecom infrastructure businesses in India via Summit Digitel, which owns 175,000 cell towers across the country.
Much like the steady stream of stake sales in fiber opcos, the sale of tower companies and tower portfolios shows no signs of slowing down, with regular deals announced around the world.
The sale of tower companies and tower portfolios shows no signs of slowing down, with regular deals announced around the world.
In November 2023, Liberty Latin America reached an agreement with Phoenix Tower International (PTI) to monetize approximately 1,300 mobile tower sites across Latin America, spanning Panama, Jamaica, the Bahamas, Puerto Rico, Barbados, and the British Virgin Islands. The deal is worth a minimum of $355 million.
Meanwhile, in December, Qatar-based Ooredoo Group, Kuwait-based Zain Group, and UAE-based TASC Towers Holding signed a definitive agreement to create the largest telecom tower company in the Middle East and North Africa region, in a cash and share deal.
The enlarged TASC, made up of approximately 30,000 mobile network towers in Qatar, Kuwait, Jordan, Iraq, Algeria, and Tunisia, has a combined estimated current enterprise value of $2.2 billion.
Elsewhere, a consortium comprising BlackRock and Grain is close to buying a 20% stake in PTI from funds managed by Blackstone. The deal is allegedly valued at $1.3 billion, giving the towerco a total value of $6.5 billion.
The Satellite Broadband Space Race
While Elon Musk’s SpaceX-powered Starlink venture continues to dominate headlines, the entrepreneur is set to face stiff competition in the low earth orbit (LEO) satellite broadband sector over the coming year.
Starlink ended 2023 with its service available in 70 markets and a reported 2.3 million satellite broadband users on its books. However, it faces an uphill battle to consolidate its position in the coming years, with a number of new players poised to enter the game.
Eutelsat and OneWeb concluded their merger in September 2023. The newly-formed entity will seek to combine the network density and high throughput of Eutelsat’s geosynchronous equatorial orbit (GEO) fleet with the low latency and ubiquity of OneWeb’s LEO constellation to offer customers global, fully integrated connectivity services.
The following month, on October 6, 2023, the Amazon-backed Project Kuiper venture successfully launched two prototype satellites from its LEO satellite broadband initiative.
Construction of the commercial spacecraft launch for China’s proposed LEO satellite rival is now underway close to the Wenchang Space Launch Site in Hainan. The site will primarily be utilized by the China Satellite Network Group—founded in 2021 and wholly owned by the government—via State-owned Assets Supervision and Administration Commission. The group plans to launch 12,992 satellites as part of its LEO network.
The Rise and Rise of Xavier Niel
If Elon Musk has seemed omnipresent in recent years, another figure who we are likely to see a lot more of in 2024 is Xavier Niel.
This French billionaire has amassed telecom assets, including Iliad (France/Italy), Salt (Switzerland/Liechtenstein), Epic (Cyprus/Malta), and Monaco Telecom. He also has major stakes in other telcos such as eir (Ireland), Telma Comoros, and multiple Latin American operators via his 29% stake in Millicom International Cellular.
On December 29, 2023, while everyone else was still digesting their Christmas lunch, Niel swooped for what is likely to be his first takeover of 2024. Via his NJJ Capital holding company, Niel agreed to buy Ukrainian mobile operator Lifecell from Turkcell in a deal valued at around UAH12.71 billion ($331 million).
Back in 2014, Niel made a shocking $15 billion takeover bid for T-Mobile US. This was soundly rejected, and viewed as fanciful within the industry. Fast-forward a decade and Niel presides over a sprawling, eclectic telecom empire.
By snapping up the unloved assets of larger groups, Niel is literally succeeding where others have failed.
By snapping up the unloved assets of larger groups, Niel is literally succeeding where others have failed.
In December, Iliad proposed to merge Iliad Italy and Vodafone Italy. The proposal valued Vodafone Italy at EUR10.45 billion ($11.4 billion) and Iliad Italy at EUR4.45 billion. The enlarged company will be a 50:50 joint venture.
If local press reports are to be believed, Niel also has his eye on Altice Portugal (MEO), which is valued at a cool EUR6 billion.
Staking a Claim: Shocking Shareholder Shuffles
Recent years have seen a series of surprise share deals, with the aforementioned Xavier Niel initially snapping up a 6.99% stake in Millicom before building up an impressive 29% shareholding.
In September 2022, Atlas Investissement—an investment vehicle indirectly held by Niel—announced the acquisition of a 2.5% stake in Vodafone Group. Atlas called Vodafone Group “an attractive investment opportunity, as per the quality of its assets portfolio and the solid underlying trends in the global telecommunications sector.”
Vodafone Group also caught the eye of UAE-based e& (formerly Etisalat Group). In May 2022, e& spent around $4.4 billion to acquire a 9.8% stake in the UK firm, becoming its largest shareholder in the process. After announcing the growth of its stake in Vodafone Group no fewer than five times, e&’s shareholding increased to 14.61% in April 2023.
Also in the UK, in May 2023, Altice UK—a unit of Luxembourg-based holding company Next Alt—increased its stake in the UK’s BT Group from 18% to 24.5%. At that juncture, Patrick Drahi, founder of Altice, confirmed that there were no plans to make a full takeover offer for BT. Altice UK first took a stake in BT Group in June 2021 when it acquired a 12.1% holding, upping this to 18.0% in December that year.
Meanwhile, in September 2023, Saudi Telecom Company (stc) acquired a 9.9% stake in Telefonica for a total consideration of EUR2.1 billion ($2.2 billion). stc noted that it does not intend to acquire control or amass a majority stake.
The surprise move reportedly prompted the Spanish government to weigh up plans for its own stake in Telefonica via the sovereign wealth fund Sociedad Estatal de Participaciones Industriales, in the interest of safeguarding national interests.
It is clear that the established telecom world order is going through a period of major upheaval.
It is clear that the established telecom world order is going through a period of major upheaval. Legacy telecom giants are being dismantled, and new players are making themselves comfortable at the top table.
Five years ago, all of these deals would have seemed highly unlikely; five years from now, the telecom landscape could well be unrecognizable.
Tom Leins
Tom Leins is a Senior Research Analyst for TeleGeography’s GlobalComms Database. Based out of the company’s UK office, he also contributes to the company’s daily CommsUpdate newsletter, which includes his popular weekly MVNO Monday round-up. MVNO industry aside, Tom has developed a strong specialization in the U.S., Latin America, and the Caribbean, tracking mergers and acquisitions, spectrum auctions, regulatory developments, market opportunities, and growth trends.