Vodafone is considering offloading more than 50,000 mobile phone masts to reduce its debt pile, its new chief executive has revealed.
Nick Read, who will succeed Vittorio Colao next month, said that it could sell a stake in its European towers business. He added that he was also considering “a potential IPO in New Zealand”. Vodafone’s market value has fallen by a quarter since January as a result of fierce competition in Italy and Spain and pressures on its Egyptian and Turkish businesses.
Investors are also fretting over the dividend. The FTSE 100 company has pledged to raise payouts every year but analysts say that its rising debt pile puts this at risk. It has debts of €31 billion, equivalent to twice its underlying profits. These debts are due to rise to nearly three times core earnings once it completes the €18.4 billion acquisition of Liberty Global’s cable business in Germany, the Czech Republic, Hungary and Romania.
The activist investor Elliott Management is also understood to have built a stake in the company.
Mr Read said that he was considering selling a chunk of the 55,000 mobile phone masts that Vodafone owns directly. Mobile phone masts generate predictable cash flows and are prized by private equity and infrastructure investors. Analysts at Barclays recently placed a €12 billion valuation on Vodafone’s European masts. Vodafone is unlikely to offload them entirely as it would then lose control over network coverage and call quality. The Times