Orange CEO Says It’s Time to Talk About a European Tower Merger

Orange SA is calling on Europe’s other big phone companies to begin talks about a merger of their wireless towers, an alternative to a full-scale tie-up of the region’s carriers that risks being blocked by European regulators.

The French company’s Chief Executive Officer Stephane Richard made the call to Vodafone Group Plc, Deutsche Telekom AG and others on Thursday after announcing the separation of Orange’s domestic and Spanish tower assets into a standalone unit.

“We’re looking at those across Europe who share our vision to not sell towers, to join forces and constitute together a real, very powerful tower company,” Richard told reporters on Thursday.

Struggling European phone companies have been splitting off their wireless mast and fiber businesses to attract investors and cut the bill for future investments. Spanish tower operator Cellnex has bought a lot of those assets, and last month American Tower Corp. agreed to buy more than 30,000 towers from Telefonica SA for 7.7 billion euros ($9.3 billion) in its first concerted push into Europe.

Orange May List Or Sell Stakes in New European Tower Company

For Richard, an outright sale of Orange’s towers to an independent player like Cellnex would harm the long-term interests of France’s dominant phone company. He prefers a combination with the infrastructure of other European phone operators to create a company that can “compete with Cellnex and reach the same size as Cellnex.”

Richard said no talks are under way right now, but Orange has received signs of interest in potential infrastructure consolidation. Orange’s new tower business, named Totem, will be operational by the end of the year and may eventually include Orange tower assets in more countries.

How a tower merger might happen is still unclear: While Richard said he’s ready to list Totem or sell stakes to investors, he said Orange won’t give up control of the business as the price of a merger or sale.

©2021 Bloomberg L.P.

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