Vodafone will remove Huawei equipment from the core of its mobile networks across Europe. Following the release of its quarterly financial report, Nick Read, Vodafone's Chief Executive, said the cost of deactivating the Huawei gear will amount to EUR 200 million over 5 years. The company's UK operations are already compliant with the government's recently imposed 35% cap of infrastructure sourced from "high-risk vendors."
For the quarter ended 31-December-2019, Vodafone Group revenue increased by €0.8 billion to €11.8 billion, reflecting the contribution from the acquired Liberty Global assets, partially offset by the disposal of Vodafone New Zealand and foreign exchange headwinds of €0.1 billion. Group organic service revenue increased by 0.8%* (Q2: 0.7%).
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Vodafone to create Europe's largest TowerCo
Vodafone Group Plc will spin off most of its European tower infrastructure into a new, fully independent "TowerCo" company.TowerCo, which will be operational by May 2020, will comprise 61,700 towers in 10 markets with potential proportionate EBITDA of around EUR 900 million.
Vodafone has recently announced active and passive network sharing agreements in Italy, Spain and the UK.
Vodafone said it believes that there is significant scope to generate operational efficiencies and increase tenancy ratios across the portfolio by creating an independent company. Based on market benchmarks for anchor tenant lease rates, existing third party revenues and the attributable cost base, TowerCo could generate proportionate annual revenue and EBITDA of around €1,700 million and €900 million, respectively. TowerCo’s attributable annual maintenance and expansion capex could be up to €200 million.
A future IPO for the new organization is a possibility.
