Play Communications Weighs Sale of 8,000 Mobile Sites

(Bloomberg) -- Poland’s Play Communications SA is considering a possible sale of its portfolio of mobile sites, people with knowledge of the matter said, as telecom operators increasingly look for ways to extract value from their infrastructure assets.

Play is working with an adviser on a strategic review of roughly 8,000 sites, around half of which are towers, the people said, asking not to be identified as the matter is private. This could lead to a sale valuing the assets at as much as 800 million euros ($898 million), according to the people.

Shares of Play were up 4.7% at the close Friday in Warsaw, after earlier rising as much as 6.7%. The company was the biggest gainer on the benchmark WIG20 index, which fell 1.9%.

Wireless infrastructure has been drawing interest from investors attracted to the steady, long-term nature of the assets. In a report published in April 2019, the consultancy Ernst & Young LLP said greater outsourcing by telecom operators of their tower assets could release 28 billion euros of capital for reinvestment in improving network coverage and speeding up 5G rollouts.

“We believe that the spin-off and sale of mobile infrastructure could be a strong positive trigger for the Polish operators,” Piotr Raciborski, an analyst at brokerage Wood & Co., wrote in a research note Friday. “It could provide the telcos with huge financial inflows, which could be used for deleveraging, investment in frequencies or 5G rollout, or increased investor remuneration.”

Funding Buybacks

Play could start a formal process in early 2021, one of the people said. A representative for Play declined to comment.

Konrad Ksiezopolski, an analyst at Haitong Bank SA, said in a note Friday that the sale of tower assets was proving a popular way for Polish mobile operators to unlock value for shareholders.

“In the case of Play, we would expect a cash injection from a TowerCo deal to be spent as an extra dividend or share buyback,” he said.

Ksiezopolski said that others in the sector, including Cyfrowy Polsat SA, could consider similar moves. Given how crucial tower assets are to each operator due to growing data consumption, Play and Cyfrowy Polsat would be unlikely to sell more than a 50% stake in their tower portfolios, he said.

The U.K.’s Vodafone Group Plc has invited advisers to pitch for a role on the planned initial public offering of its European towers unit, which could raise more than 2 billion euros, Bloomberg News reported. Eir, the Irish phone carrier controlled by billionaire Xavier Niel, sold a portfolio of wireless infrastructure assets to U.S.-based Phoenix Tower International in May.

Play is a consumer-focused mobile network operator that had more than 15 million subscribers last year, according to its website.

©2020 Bloomberg L.P.