Dutch operator KPN is starting a new joint venture with the Dutch pension fund ABP. Both parties have signed an agreement to create a new tower company (TowerCo), bringing together their passive mobile infrastructure assets. This partnership is in line with KPN's ‘Connect, Activate, and Grow’ strategy to optimise the value of its passive infrastructure assets and retain strategic flexibility, KPN said on Wednesday.
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TowerCo's Portfolio
TowerCo is set to manage a portfolio of approximately 3,800 towers and rooftops across the Netherlands. These assets include those of NOVEC and OTC, portfolio companies owned by TenneT and ABP respectively. KPN has also committed to a built-to-suit arrangement for the next 10 years.
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KPN's Commitment and Tenancy Plans
TowerCo and KPN have entered into a long-term master service agreement, under which KPN will continue to be a tenant of TowerCo for an initial period of 20 years. TowerCo aims to further increase tenancy levels of its network by providing access to fully modernised towers and rooftops, the official release said.
KPN said this transaction allows it to ensure that its mobile network continues to meet the performance standards required to deliver high-quality services to subscribers, to accommodate new technologies, such as 5G, and to expand coverage into underserved areas. As part of the transaction, some of the existing lease terms have been reset.
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KPN's Majority Stake in TowerCo
Under the terms of the agreement, KPN will hold a majority stake of 51 percent in TowerCo, with ABP holding the remaining 49 percent. The transaction also involves KPN acquiring TenneT's stake in NOVEC. KPN has agreed to an upfront cash payment of EUR 120 million to NOVEC/OTC's current shareholders for the stake in the company, subject to closing adjustments.
