Megafon will allocate cell towers to a separate company and think about selling it

    PJSC Megafon intends to separate its cell towers into a separate company. The operator will start with an inventory of infrastructure, and then will engage in the selection of management to manage the new company. Megafon has about 14,000 towers. “We are seriously considering this opportunity for ourselves,” said Director General of the operator Ivan Tavrin to reporters. But this process "will certainly take more than one quarter," he added.

    The operator’s manual does not exclude that in the future the new company will be sold. In the near future, the issue of spinning off the company will be considered by the board of directors of Megafon. The meeting of shareholders will take place when a specific transaction is ready.

    You should not concentrate on the formal decision of the board of directors, its members support the management’s decision to separate the infrastructure into a separate subsidiary, Tavrin also said.

    Megamind wrote that the Vimpelcom operator put up for sale 50,000 towers for base stations in Russia and the near abroad. The company plans to get $ 5 billion for them. Vimpelcom is ready to sell towers in Russia, Ukraine, Kazakhstan, Armenia, Kyrgyzstan, Uzbekistan, Tajikistan and Georgia.

    “In general, as a direction of infrastructure monetization [tower sales], it’s an interesting way to get additional money for network development,” commented Alexander Popovsky, VimpelCom Vice President for Corporate Strategy and Business Development.

    According to interlocutors of Bloomberg, the operator is thus trying to compensate for its losses. Holding towers can be separated into a separate infrastructure company with an industrial or financial partner. An IPO is also being considered for this company.

    “Owning such an infrastructure is a stable and high-margin business, tower companies around the world have a margin of 60–70%. The multipliers of such companies are higher than those of mobile operators, but it’s too early to talk about multipliers in the case of Russian companies, since there have been no precedents [towers], ” Tavrin told Interfax.

    According to the results of the third quarter of 2015, MegaFon increased revenue by 0.3% (to 81.2 billion rubles) and profit by 4% (to 11.3 billion rubles) compared with the same period of 2014. According to the reporting , the main driver of MegaFon’s income was the growth in the use of mobile Internet by subscribers. This is what enabled the operator to show revenue growth for the quarter for the first time in a year.

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