Hamburg Tobías Martínez Gimeno is Europe’s radio tower champion. The business with the locations where mobile phone providers mount their antennas is little noticed – but lucrative. The company Cellnex, which he manages, has secured around 128,000 of these mast locations in twelve countries.
Even if part of it is still under construction: Without Cellnex, there would be a huge gaping hole in Europe’s mobile phone networks. Among the customers who usually conclude long-term leases are the British Vodafone and the Dutch KPN. With a series of takeovers, the Spaniards have become the market leader in their segment within a few years, making a profit of almost two billion euros in 2021.
Only in Germany – the largest mobile phone market on the continent – have they not been able to land so far. Martínez Gimeno now wants to change that. In an interview with the Handelsblatt, he reaffirmed his interest in Deutsche Funkturm, a subsidiary of Deutsche Telekom. With 33,400 tower locations, it is the market leader in Germany and is valued at up to 18 billion euros.
“We would be more than happy if we could come to an agreement,” the Cellnex CEO told Handelsblatt. Germany is a “super attractive” market for Cellnex. A deal with Telekom would “transform” his company and take it to a whole new level. Martínez Gimeno does not want to comment specifically on the negotiations themselves.
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The telecom infrastructure market is hot, with valuations at record highs. In view of a debt level of 132 billion euros, Telekom boss Timotheus Höttges wants to use this opportunity and turn the subsidiary into money. The team of his M&A expert Thorsten Langheim is currently negotiating possible conditions with interested parties.
Cellnex was considered one of the favorites right from the start. But competitor Vodafone from London, which is also competing for the Telekom towers through its subsidiary Vantage Towers, is currently under pressure to make a more attractive offer. Investors are asking CEO Nick Read to make a deal to give himself more financial leeway. In a bundle with Deutsche Funkturm, he could achieve a higher price for Vantage shares.
Also keep an eye on the federal government as a shareholder
Telekom did not want to comment on the negotiations when asked. You can clearly imagine working together there. It is said in corporate circles that the Cellnex management is very much appreciated. You would have written a “success story”. Bonn and Barcelona had already negotiated a partnership in previous years. So far, however, there has only been one deal in the Netherlands, where Telekom merged the towers of its subsidiary T-Mobile Netherlands with those of the Spaniards in 2021.
An entry or takeover of Deutsche Funkturm would be a powerful growth lever for Cellnex. In terms of value, the silent Spaniards should then rise to become Europe’s largest mobile phone company after Telekom. Since going public in 2015, Cellnex has already multiplied its market capitalization to currently almost 31 billion euros. This means that the company is now valued higher than the Spanish telecom giant Telefónica, which is known in Germany with the O2 brand.
Martínez Gimeno and his team understood earlier than others that the European mobile communications market would be assimilated to that in the US, where the towers were never in the hands of individual providers. The masts are no longer used exclusively today and therefore no longer represent a decisive competitive advantage in the medium term.
Martínez Gimeno sells his company as a reliable, solid partner who is not “obsessively interested in financial results”. Thanks to its neutrality, Cellnex can work in a more quality-oriented manner than some of its competitors who depend on a large mobile communications provider. In fact, the Spaniards enjoy an excellent reputation in the industry. Cellnex is “the gold standard among tower companies,” says a high-ranking telecom manager.
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Martínez Gimeno also looks towards the German government, which is still Telekom’s largest shareholder, in an interview with the Handelsblatt. The manager emphasizes Cellnex’s competence with regard to the reliable supply of train routes and motorways: “If we can do that in other countries, why not in Germany?”
Cellnex has many fans in the Telekom leadership.
(Photo: ddp/Sven Simon)
If the deal with Telekom succeeds in Germany, Cellnex would probably finally be ahead of the competition. The distance to number two, Vodafone’s Vantage Towers, which currently has 82,000 masts in ten European countries, would be immense. Even today, Vantage is struggling to achieve its own growth goals. Cellnex would grow into an infrastructure giant that hardly any ambitious telecom provider in Europe would be able to ignore in the coming decades.
Telekom wants to announce a deal by the second half of June at the latest. Martínez Gimeno advertises: “If value creation is more important to you than mere monetization, then Cellnex is the best choice.”
More: Deutsche Telekom finalizes the sale of the radio tower division – these are the bidders