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Vodafone And Telefonica Ink 5G Terms In Move To U.K. Tower Sales

Vodafone Group Plc and Telefonica SA’s U.K. carrier O2 have agreed on how to roll out the next-generation 5G wireless technology via their shared British mast company, moving a step closer to a potential sale of the venture.

The two carriers will share next-generation wireless technology like antennas but divide autonomous control over about a quarter of the masts, so each company can differentiate services. That will speed up the roll-out of 5G across the 50-50 joint venture, called Cornerstone, which owns about 16,500 masts across the U.K., they said Wednesday.

Vodafone and O2 “will now proceed to explore potential monetization options for Cornerstone,” the companies said in a joint statement. Sharing technology will also help cutting costs, they said.

Both companies are seeking to trim their debt piles, and one way is to invite more users or investors into infrastructure to generate income. Vodafone is reviewing its roughly 58,000 European towers and has moved toward network-sharing deals with rivals in Italy and Spain.

Asset sharing is increasingly popular as telecom companies seek to minimize the burden of building expensive fiber and 5G infrastructure while still being able to reap the rewards. Cable and antenna assets are seen trading at higher earnings multiples than their customer-focused units, which has led to a wave of investment from tower operators including Cellnex Telecom SA and infrastructure investors such as Macquarie Group Ltd.

The Vodafone-Telefonica deal will let the companies invest more in services and reduce their environmental impact, the companies said, an update after first announcing the plans in January. Telefonica and Vodafone report financial results this week.―Bloomberg Quint

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