Telekom turns soil, concrete and steel into money. The group sells most of its subsidiary, GD Towers, for € 17.5 billion to two foreign investors who bid together: Canadian Brookfield and US Digitalbridge. This means that foreign investors take over more than 40,000 radio towers in Germany and Austria. On them hang antennas from suppliers such as Vodafone, 1 & 1 and Telekom itself. The contract covers the towers and the land on which they stand – the so-called passive infrastructure. The network itself remains in the hands of Telekom – says the company’s spokesman.
North American investors specialize in infrastructure. Brookfield owns 200,000 cell towers and rooftop radio stations around the world. The purchase price is 10.7 million euros in cash, the rest are debts incurred by buyers. 800 people work at GD Towers. The operation of the towers has become too exhausting for Telekom, specialists from overseas can do it more efficiently, so the Bonn conviction. First of all, they need money there. Telekom’s income will be used to reduce debt, which amounts to over EUR 130 million. In addition, she would like to spend this money on taking over the majority of T-Mobile in the US.
Brookfield unexpectedly won the tough, competitive bidding. They not only overtook the investor-led consortium of KKR. Canadians only joined Digitalbridge late, after the departure of their previous partner: Cellnex from Spain was actually the favorite to buy. According to reports, the market leader in Europe wanted to give Telekom a maximum of 20 percent. share.
Rapid examination by the European Commission
Vantage Towers, Vodafone’s radio tower subsidiary, was also interested. However, a competitor’s entry would raise the suspicions of competition authorities. While he was optimistic that antitrust authorities would approve the deal with Vodafone, Telecom chief Timotheus Höttges said. However, it would take him twelve to fifteen months to investigate – too long for him. The review of the Brookfield agreement by the European Commission should be faster. At the end of the year, Telekom wants to end it.
The group said it would continue to exert influence through a minority stake of 49 percent and two board members. You also have “unlimited access” to the towers “thanks to a favorable long-term lease for approximately 30 years”. You also have the right to take back control of the company.
But are foreign investors motivated to take care of critical infrastructure in Germany? The spokesman says: “Of course, further network expansion and site modernization are guaranteed and closely coordinated with our partners.” The Federal Network Agency explained: “As a frequency principal, Telekom must ensure that it can continue to operate its network without disruptions and that it can use the frequencies efficiently without interference.”
Manuel Atug, IT security expert and spokesman for AG Kritis, in which experts deal with the security of the most important infrastructure in Germany, criticizes the sale: “We want to protect the basic cellular network with ‘critical components’ of the critical infrastructure, especially from abroad.” 51 percent of the physical components of the critical infrastructure base to foreign investors. I don’t think it adds up from a national security point of view. A Telekom spokesman says: “It’s about steel, concrete and earth, everything that is not technology: no antennas, network technology or fiber optic lines.”
The business of cell towers is booming as European telecommunications companies sell towers and landlines. Because they have to invest a lot of money in fiber and 5G networks. Investors consider towers to be a safe source of income. Mobile operators make long-term contracts with landlords and the money flows reliably. GD Towers earned EUR 640 million in 2021.