Deep dive: what’s the deal with network sharing?

Information is only as useful as the context you place it in, and for that reason Telecoms.com periodically provides deep dives into industry-defining topics. In this one Jamie Davies explores the opportunities and challenges surrounding network sharing.

Each year brings different trends and talking points to the forefront of the industry, and 2020 is no different. This year, it appears network sharing will be one of the biggest talking points.

5G is on the horizon and it has the telcos scrambling. Upgrading telecoms infrastructure is going to be a very expensive job, ranging from fibering up a nation, to purchasing active infrastructure for sites and even paying for civil engineering jobs; building passive infrastructure is not cheap! Telcos need a way to make the financials of the telecoms future work.

All about the money, money, money

While it might not sound like the sexiest of trends to be assessing, it could turn out to be one of the most impactful. Telcos are scrapping and scraping around to fuel the 5G euphoria which has gripped the industry, and any option to do it more cost effectively would be lovingly embraced.

“Network sharing will be vital to mobile operators still grappling with ways to make the economics of 5G add up,” said Kester Mann of CCS Insight. “Deutsche Telekom for example has projected that the cost to deploy 5G across Europe would come out at between €300 and €500 billion.

“It’s no surprise then to see a growing list of operators partnering with each other in a bid to keep a lid on 5G capex. But these deals may just be the tip of the iceberg; investment models probably need to evolve to become more creative and innovative in the long run. For example, Poland has been considering plans for a single national 5G network at 700MHz. And it would be no surprise to see a European city take the plunge and deploy all 5G mobile infrastructure through a third party.”

Back in October, during a Madrid 5G core conference, Telecom Italia’s Lucy Lombardi outlined the difficulties being faced by the operators. Between 2010 and 2018, Lombardi suggested industry revenues were down $27 billion, but the telcos had invested $250 million in the network. Over 2019-2025, Lombardi suggested another $1.4 trillion would be spend by the industry, 70% of which would be on deploying 5G.

In short, the old ways of telecommunications are not going to cut it in the digital world of tomorrow. There are plenty of opportunities for the telcos to make money as everything and anything gets connected to the internet, but new business models need to be created to ensure these companies do not go bust in the pursuit of profits.

As Mann highlights, various different countries and regulators are pursuing different approaches to create value and efficiencies in the deployment of next-generation communications infrastructure. The Poland example is an excellent one, though the UK is pushing forward with its own innovative approach.

“In the UK, the recent confirmation of plans to introduce a shared rural network is rare example of successful collaboration between mobile operators more often engaged in cut-throat competition to attract and retain subscribers,” Mann continued.

“It aims to curb costs and accelerate timelines to bring more people on online who live in remote areas. It will also help overcome the perennial challenge of tough planning and access restrictions that has hindered network roll-out in the past.”

The UK Shared Rural Network could be described as both an innovative initiative and a business compromise.

As part of the initiative, £530 million will be contributed by the telcos with another £500 million being put forward by the UK Government. The plan will include reciprocal agreements between the telcos to share existing infrastructure and also joint investments to build telco-neutral sites for total not-spots.

This is an innovative approach to deliver connectivity to the most difficult to reach places in the UK, but it is also a compromise. To secure agreement from the telcos for the Shared Rural Network, the Government and the regulator will have to agree to drop the deeply unpopular coverage commitments attached to the 700 MHz and 3.6-3.8 GHz spectrum auctions.

However, what is worth noting is this is not necessarily a new idea. EE (or what was T-Mobile at the time) and Three formed MBNL in 2007, initially to operate and deliver 3G networks, while O2 and Vodafone teamed ahead of the 4G rollout to form CTIL in 2012. Both of these organisations offer financial benefits to the telcos.

“From a cash perspective it’s broadly 50/50 on the usual operating expenditures – so site rental, rates, field operations, etc. We then have the option of sharing the build of networks – we don’t do that for 4G or 5G, but we did that in the 3G build and that saved 50% of the initial capital expenditure, including on capacity and transmission costs by usage,” said Tom Bennett, Networks Director at EE

We’re not alone…

Elsewhere around the world, regulators have taken their own approach to encourage cooperation in the industry. In Malaysia, for example, the Malaysian Communications and Multimedia Commission (MCMC) has outlined another unique approach.

Licenses for the 700 MHz and 3.5 GHz spectrum bands will be given to a consortium rather than the individual telcos. Investment in infrastructure will be shared, as will the spectrum resources to deliver commercial services, though it is unclear how the telcos will play with each other.

For Malaysia, this is an important initiative. 5G is an expensive technology to deploy, but the regulator is also keeping an eye on 4G. In Western markets 4G investments are not front of mind as coverage is wide and deep, however in countries like Malaysia, the digital divide is a lot more apparent. 4G investments need to continue, and this approach to shared infrastructure is partly to ensure enough money is still directed towards 4G.

However, what is also worth noting is that not it is not a given regulators will be accepting of shared network initiatives.

Earlier this month, the Belgian Competition Authority (BCA) put the brakes on a joint-venture between Orange and Proximus which would create a shared network. The regulator is investigating whether this would negatively impact competition, after Telenet complained over the tie-up.

The issue in Belgium seems to be focused on the number of telcos which are currently present and the breadth of the agreement between the pair. As there are only three mobile players in the market, and the JV would span across all generations from 2G to 5G, the complaint focuses on the idea that it would reduce the number of infrastructure players from three to two. This might have an impact on deployment, as well as placing an unreasonable stranglehold on Telenet.

This is not the first time this issue has been raised either.

Last August, the European Commission informed O2 CZ and T-Mobile CZ that the proposed network sharing agreement in Czech Republic would breach the Commission’s rules on competition. The duo have been in a network sharing agreement since 2011, which incorporating 2G, 3G and 4G for 85% of the country, though the European Commission has now prevented this expanding further.

As is the case in Belgium, the Czech Republic only has three material telcos investing in mobile communications infrastructure. Although there are benefits for scale deployment, the European Commission suggested:

“…the network sharing agreement is likely to remove the incentives for the two mobile operators to improve their networks and services to the benefit of users.”

The European Commission and national regulators are generally open to ideas on how the telecommunications industry can be more efficient, though they are particularly sensitive to competition. Anything which would hint at removing competition would be quashed almost immediately, which is the tricky path which telcos tread. This is particularly notable in markets where there are only three operators, and one has been left out of the network sharing agreement.

Looking at the rules in question at a European level, Article 101 dictates the state of play. These rules effectively look to prevent:

  • Price fixing
  • Production, development or investment limitations
  • Supply scarcity
  • Placing a competitive disadvantage on other parties

The maintenance of a fair and reasonable market is of course a noble pursuit, but the European Commission and national regulators do have to be careful in applying these rules. The telcos do need to apply new models to ensure the feasibility of the 5G business model.

Consolidation is still the enemy

“Regulators will clearly be vigilant, as they want to make sure that sharing does not turn into mobile-to-mobile consolidation, which they don’t like,” said Dario Talmesio, 5G Practice Leader at analyst firm Ovum.

“They could see that sharing can be consolidation through the backdoor.”

The European Commission and its regulators are very sensitive to consolidation. Despite the industry begging for attitudes to change in the pursuit of scale economics to ease the burden of deployment, the regulators have stood their ground to refuse consolidation. The attempted merger between O2 and Three in the UK during 2016 was blocked on the grounds of competition, as was an effort by Telia and Telenor to merge their Danish businesses in 2015.

The rationale for both of these mergers was to create a single-entity where the economics of running a telco at scale were more attractive. As Talmesio points out, network sharing initiatives are very important to ensure the industry progresses in a manner which keeps pace with the consumer and enterprise.

“CSPs have for very long been sharing some elements of their networks, and every G has pushed them to share a bit more, mainly because of the cost and time it would take to build new sites,” said Talmesio.

While it will never be the case that the network is finished, the widespread upgrades which are demanding with every new ‘G’ is what makes the telco industry unique and eye-wateringly expensive to play in. This is where the economics of scale are critically important and why European telcos are perhaps on the backfoot.

European nations are small, and some are drastically smaller than say China or the US. While larger countries present their own challenges in terms of coverage, the benefit of a scaled subscriber base gives more confidence to make bigger investments. Some European telcos will never have this advantage so will have to look for alternative means to fund network deployment.

Although the estimates vary quite considerably, one thing is for certain; network sharing initiatives ease the financial burden of network deployment.

There are of course financial benefits to network sharing, though the estimates do vary. A report from the Body of European Regulators for Electronic Communications (BEREC) suggests the following:

  • Passive sharing cost saving of 16-35% on CAPEX and 16-35% for OPEX
  • Active sharing cost saving 33-35% on CAPEX and 25-33% for OPEX

Efficiencies are increased when spectrum costs are also shared, though this is unlikely to be a common practice as spectrum assets are often considered a differentiator. If this was to be removed, the industry would start the precarious walk towards utilitisation.

Looking at the proposed joint-venture between Orange and Proximus, the duo will of course be saving money, but another interesting opportunity is in scaling the network. The shared network initiative would increase coverage by 20% in comparison to the combined footprint if the teams are to pursue network deployment independently. We suspect 20% is a comfortable number, and this could be increased should a partnership want to deploy more aggressively.

The financials of the telecoms industry is not working in conjunction with the demands of the consumer and authorities. Cheaper tariffs, faster speeds, greater coverage, better reliability. All of these factors weigh one side of the equation making it difficult for the telcos to continue.

Another factor to build the case for network sharing initiatives is somewhat more bureaucratic.

Telcos are being asked to improve both outdoor and indoor coverage in both the rural and urban environments, but in some cases the biggest problems can be accessing or procuring new sites to deploy infrastructure, both passive and active. It might make sense to share these sites as there is limited availability, or it would at least make more sense to share the transmission lines to ease the burden of civil engineering costs. Another factor you have to consider is the rental fees charged by landowners, some of which are deemed unnecessarily high by the telcos. This has been frequently highlighted under the term ‘ransom rent’ as the telcos have little option if they are to expand coverage.

In some towns there is another bureaucratic nightmare to consider; listed and historical buildings. In Cambridge, UK, for example, so many of the structures are deemed historical or protected, the number of potential mobile cell sites is substantially smaller; share infrastructure is a creative solution.

Its not all plain sailing

What is worth noting is that there are also drawbacks to network sharing agreements.

Firstly, more cooks spoil the broth. With shared assets in operation, especially active assets, require consent and coordination between the sharing parties. There are numerous challenges here, most notably aligning commercial objectives of the parties and more signatures to acquire. Evolution of these sites could certainly take longer in the future.

Another challenge arises when something goes wrong. Debugging the issues could be much more complicated, though this is entirely dependent on how much the two operations are entwined.

BEREC has also noted shared networks could also increase the electromagnetic field emissions. Each regulator imposes limitations on electromagnetic field emissions therefore bureaucratic revision might well be needed should more of these initiatives bear fruit.

The combination of or joint-funding of assets also decreases the resilience of communications infrastructure in a country. Fewer independent mobile networks or infrastructure might well make a country more vulnerable as it reduces the number of points of failure and robustness.

It is also worth bearing in mind that there is only so much space available on masts for active equipment. These concerns were raised in Bulgaria, Cyprus and Croatia, amongst other nations. Networking planning is another concern, as each MNO has its own unique requirements, while technical issues in relation to existing suppliers and protocols could mean MNOs are not compatible with each other.

It would be unfair to suggest network sharing is an uncomplicated path forward.

Despite there being momentum for network sharing, not all of the regulators share the enthusiasm. Aside from Belgian scepticism, Hungary believes non-participating MNOs would face a risk of being squeezed out of the market, while Austria has suggested incentives for investment will decrease in the long term.

There will be pros and cons on both sides of the equation, but it does look to be the fairest and most reasonable compromise to ensure a healthy and sustainable telecommunications industry. The traditional way of deploying networks does not look to be financially feasible, therefore new ideas are needed.

Network sharing is one of the most prominent trends during the early days of 2020 for good reason, and it is safe to assume more of these initiatives will emerge as we progress through the year.

Telcos are implementing ECC powers unfairly – Ulster Farmers Union

The Ulster Farmers Union (UFU) has suggested telcos are unfairly implementing entitled powers through the Electronic Communications Code (ECC) to drive down land rental costs.

Friction between landowners and telecommunications companies is nothing new, but this is one of the first condemning public statements made by an association. The comments from the UFU are a sharp swing from the previous rhetoric, where the telcos complained of ‘ransom rents’ and the balance of power being too much in favour of landowners.

“While we expect current agreements to be honoured, what is happening stems directly from the Code,” said Victor Chestnutt, Deputy President of the UFU. “This is rooted in significantly reducing rent and compensation payments.”

Introduced as part of the Digital Economy Act of 2017, certain parts of the ECC were intended to address the dynamic between landowners and telcos. Telcos have traditionally leased land off various different parties, including famers, to house communications infrastructure to improve mobile coverage across the country.

The original complaints, from the telcos, date back years. The suggestion is that as there were few alternatives once a mast had been constructed and mobile equipment has been placed on the passive structure, landowners were using this position of power to drive up rental agreements and compensation. The telcos have always felt they were paying too much, and landlords were taking advantage of upgrade to renegotiate leases to further compound the misery.

The ECC was intended to offer greater protections to the telcos, creating a mechanism to dictate what is deemed fair and reasonable leasing terms and compensation, as well as grant greater access to land. However, the UFU is suggesting the telcos are using the fine print to drive down costs to an unfair and unreasonable level.

“Current agreements will be honoured but taking advise after may be a prudent course of action,” said Chestnutt.

What should be noted is that this is an on-going and long-term conflict between the two parties. A lot rests on the shoulders of the telcos and due to the vast expense of deploying mobile networks, they are perfectly within their right to attempt to reduce costs. This would be to the benefit of society and the economy on the whole, as it would accelerate the continued rollout of 4G and introduction of 5G, but the question which needs to be addressed is whether the ECC over-compensates for years of an unbalanced relationship.

The ECC was supposed to balance the equation, but whether this is the case remains to be seen.

Although it has been more than two years since the ECC was written into law, these issues are only emerging now. As Chestnutt highlights above, the telcos are legally obliged to honour existing agreements, though as these expire, farmers could be left in precarious positions, with the telcos using the ECC to drastically reduce compensation.

That said, this strategy could backfire and inhibit the digital dream which is enthralling the country today.

Michael Watson, a partner at law firm Shulmans, has told Telecoms.com that the drastic reduction in compensation could lead to a landowner revolt. If the financials do not match up to the hassle of housing telecoms equipment, landowners will seek ways and means to make sure the environment is unsuitable.

Farmers could relocate a pig pen to demonstrate there is a commercial use for the land, undermining the telcos case using the ECC, while building owners in urban environments could elect to house solar panels on the roof as an alternative.

As Watson highlights, this is a relationship between two parties, both of which need to benefit. People are very protective over their property, therefore if it is felt the telcos are abusing this dynamic, means to make the property unsuitable for telecoms equipment will be sought.

A good relationship is one where both parties benefit, however, there is a risk landowners could feel snubbed by this new dynamic.

But what could be the negative consequences?

Number of mobile masts in UK (Ofcom estimates)
2018 41,500
2017 42,500
2016 43,500

While there certainly is consolidation in tower assets thanks to joint-ventures between the telcos, it is perhaps concerning the number of mobile masts is decreasing year-on-year across the UK. At a time where coverage demands are increasing and higher frequency spectrum is being implemented, most would want this trend to be reversed.

However, if the risk of landowners snubbing telco leasing agreements becomes a material reality, this will be difficult.

What is worth considering is that the ECC grants the telcos considerable legal powers. If a dispute arises, the telco now has the power to take the landowner to court in an attempt to force through the lower compensation, but this presents its own risk.

The Lands Chamber of the Upper Tribunal is the only court room in the UK which is currently in a position to hear such disputes. This creates a niche in the legal system which will likely lead to more consistency in rulings, however there is also a risk of a legal bottleneck.

Legal complaints take time to resolve, and should enough disputes emerge, it won’t be long before a queue emerges at The Lands Chamber. Just at a time where the UK needs clarity and simplicity to rapidly rollout next-generation infrastructure, a very real bureaucratic risk is present.

Although this paints a worrying picture, what is worth noting is that both the telcos and the landowners will want to hype this situation in favour of their own objectives. The telcos made the ransom rent landscape seem almost apocalyptic at time, driving the lobby machine into overdrive, though the same could be said for the associations representing the landowners. Suggesting billion-pound corporations are abusing struggling farmers is certainly one way to attract headlines to the cause, but it always worth remembering this is a lobbyist mission.

Ultimately, more uncertainty and the risk of delays is the last thing anyone in the UK connectivity landscape wants.

BT/EE, Vodafone, Three and O2 were all approached for comment, with no response at the time of writing.

Cellnex finds another €800m to expand tower empire into Portugal

Cellnex has expanded its European footprint once again through the acquisition of Omtel, taking the infrastructure giants into the Portuguese market.

It is perhaps becoming difficult to fully convey the aggressive nature of Cellnex’s expansion over the last 12-18 months. This €800 million transaction is another to add to the increasing list of moves made by the firm to quickly expand the geographical relevance of the business. Altice Portugal and Belmont Infra Holding are the beneficiaries this time.

“With Omtel, we are not only integrating one of the leading independent telecommunications infrastructure operators in Portugal,” said Cellnex CEO Tobias Martínez.

“We are also committing to consistent growth in Europe, incorporating an eighth market – which naturally extends the current geographical coverage of the seven countries in which we already operate, and in this case especially due to the proximity and operational synergies that may arise with the Group in Spain.

“We are also incorporating a new client, Meo, which is the market leader and joins a rich and diversified mix of clients in Europe, covering the leading operators in the markets in which we operate.”

As part of the deal, Cellnex will acquire 3,000 mobile cell sites, roughly 25% of the total across Portugal, while there are plans through the build-to-suit (BTS) programme to deploy additional 350 by 2027. The current expansion plans have been tabled at a cost of €140 million.

While Cellnex is proving to be a very ambitious firm right now, this might be down to opportunism more than anything else. European telcos do not have the same scale as those in North America or Asia and have been financially strained over the course of the last decade. Most are now searching for funds to fuel 5G and fibre deployment plans, and divestment in passive infrastructure is proving to be a popular strategy.

The telcos financial situation has been well-publicised and Cellnex is one of a few different players seemingly hunting bargain deals for infrastructure assets across the continent.

Aside from the Omtel investment, Cellnex has also bought 1,500 sites from Orange Spain, Arqiva’s Telecoms division for £2 billion, Irish tower company Cignal, 70% of the operating company which manages Iliad’s 7,900 sites and 2,800 sites from Swiss telco Salt. Alongside this spree of acquisitions, Cellnex also obtained marketing and operating rights for 220 BT high towers distributed throughout the UK for 20 years and has signed numerous co-operation deals across the continent.

All of these deals were announced post-May 2019. It has been a very busy six months.

Cellnex has certainly noted telcos are in a precarious position and is throwing some serious cash to obtain assets. It might be expensive in the short-term, but it has guaranteed customers for as long as anyone can stare into the future; Cellnex and its 60,000 sites is a heavy-weight, profit making machine.

Telefonica sells 2,029 towers in Ecuador and Colombia

Telefonica has confirmed the sale of 2,029 towers in Ecuador and Colombia for €290 million to Phoenix Tower International.

This is one of the first signs we have seen of the Telefonica ‘Five Point Plan’ becoming a reality. Telefonica is a business which is seemingly drowning in debt, and one pillar of this new strategy has been to monetize tower assets around the world.

“We are honoured to expand our relationship with Telefonica in Ecuador and Colombia and look forward to working closely with them on their ongoing wireless build-out initiatives across the world,” said Phoenix Tower International (PTI) CEO Dagan Kasavana.

“These transactions are exciting for PTI and will allows us to become the market leader in Ecuador, a USD based market with three healthy wireless operators with significant 4-G build-out needs in the coming years. The transaction in Colombia solidifies PTI’s strong market position with over 1,800 owned towers. Colombia has been a great market for PTI, and we see continued growth from all of the carriers in the coming years.”

The Telefonica executive team has been under considerable pressure over the last few years to deliver additional value and drive down the debt. It seems this pressure has only intensified as the realities of 5G and fibre investments start to become a reality. The disposal of passive infrastructure is one-way numerous telcos are raising funds to fuel future ambition.

Iliad joins the tower divestment trend

Iliad has confirmed the sale of its tower businesses in France and Italy to European infrastructure giant Cellnex.

As part of the deal, a 70% stake of the tower infrastructure unit in France will be sold to Cellnex, while 100% of the Italian tower unit will be off-loaded. Heading the other direction will be €2 billion, a useful amount of cash as the 5G spending spree looms large on the horizon for Iliad.

Although this deal has been in the works for some time, it demonstrates an increasingly popular trend around the world. Telcos need cash for 5G and fibre upgrades, and tower businesses have been deemed as surplus assets. Vodafone, Reliance Jio, Telefonica and Altice Portugal are all companies who are using the passive infrastructure assets as a means to raise cash, and we suspect the trend will become more apparent through 2020.

What remains to be seen is whether the divestment in fixed, dependable assets will be in the future? Without owning the passive infrastructure, these telcos become tenants. Could this be considered a short-sighted move?

Iliad is a firm which needs to ease some pressure on executives and perhaps this is one way in which is can achieve this. Share price has marginally increased off the back of this announcement, though it is still 50% down on the price in May 2017. The company is also harbouring considerable debt, which needs to be addressed sooner rather than later.

For Cellnex, this is just business as usual. The sites acquired from Iliad adds to the 1,500 purchased from Orange in Spain earlier this month, as the infrastructure giant benefits from the telcos woes. Owning passive infrastructure might not be the most exciting business in the world, but it is very profitable.

Passive infrastructure is a long-term investment which will never stop paying off (highly unlikely anyway). Radio antennae will have to be placed somewhere after all, and networks are only going to become denser, increasing the demand for passive infrastructure. While the wallets are strained for the telcos, it could prove to be a very profitable period for the infrastructure companies who will accept the valuable assets without hesitation.

Brookfield expands telco footprint with WIG stake

Brookfield Infrastructure has expanded its communications infrastructure portfolio to the UK through the acquisition of a 93% stake in Wireless Infrastructure Group (WIG).

Acquired from 3i Infrastructure for £387 million, WIG manages a portfolio of more than 2,000 ‘communications assets’ across the UK, including mobile network masts in rural and suburban areas, as well as wireless access infrastructure in stadiums, other buildings, along streets and transport routes. The company has also recently expanded into the Netherlands and Ireland.

Brookfield, which owns and operates assets (including data centers) in the utilities, transport, energy and data infrastructure sectors across the Americas, Asia-Pacific and Europe, is developing its ‘neutral host’ wireless access network infrastructure portfolio, having just completed a $3.7 billion deal to acquire mobile tower assets in India from Reliance Jio.

Closely-related investment firm Brookfield Asset Management, meanwhile, was part of a consortium that acquired Vodafone New Zealand earlier this year.

Arqiva to become the latest acquisition in Cellnex spending spree

Spanish infrastructure giant Cellnex has said it will acquire the Arqiva telecommunications business unit for £2 billion.

The transaction will make Cellnex the largest independent wireless infrastructure company in the UK, as well as the largest across Europe. The deal will add 7,400 sites to the footprint, as well as the rights to market an additional 900 across the UK. Cellnex’s total portfolio now exceeds 53,000 sites.

“The Arqiva Telecoms division acquisition is a key milestone for Cellnex,” said Tobias Martinez, CEO of Cellnex.

“Its strong UK asset-base, revenues and financial profile, combined with its long history at the heart of UK digital infrastructure, make it a perfect addition to our operations. This deal will not only add c.8,300 telecom sites to our portfolio but an experienced team that will further strengthen Cellnex’s demonstrated ability to meet its customers requirement.”

This is another step towards the aggressive expansion of the Cellnex business. Since the company’s IPO in 2015, Cellnex has invested or committed to invest €10.8 billion, via acquisition or construction. Between 2015 and 2027, should the company meet its own targets, it would have grown the asset portfolio by 42,000 structures.

Elsewhere in the M&A domain, Cellnex has entered into long-term strategic cooperation agreements with Iliad and Salt to acquire roughly 10,700 sites. It has also entered build to suit (BTS) programmes with the two telcos to build an additional 4,000 sites. Last month, it also announced the acquisition of Cignal in Ireland. This deal brought 546 sites into the portfolio, while there are plans to deploy another 600 by 2026.

And while owning structures across the continent is a very valuable business nowadays, another interesting element to this deal will be access to street furniture in London.

Arqiva currently manages concessions to use street furniture, lampposts for example, as locations for network infrastructure equipment in 14 London boroughs. This has proven to be somewhat of a controversial topic in recent months, with some telcos, such as BT, calling for open-access to street furniture to improve mobile experience.

“While the concessions model made sense in the early 2010’s when it first came into common use, the market and regulatory landscape have changed, and it’s become clear that exclusivity agreements act as a barrier to further 4G and 5G investments,” Paul Ceely, BT’s Director of Network Strategy, said at the time.

BT plans to increase small cell deployment across the capital for network densification plans. These initiatives are key to addressing network congestion in the busiest areas, but also compensating for the shorter coverage experienced when making use of higher frequency spectrum in the future.

These concessions are attractive to both the councils and the infrastructure companies. The councils collect the concession fee, while the infrastructure company assumes the business risk and collects the wholesale fee from the telco. Enough of these concessions and it turns into nice profit-maker, though it will not be making friends with the telcos, who effectively want something for nothing.

With existing relationships with all four UK MNOs, as well as joint-ventures MBNL and CTIL, this could prove to be a useful transaction for Cellnex. Despite 5G being launched across the UK, the rollout has been slightly staggered due to the on-going Supply Chain Review. There is plenty of profit to collect as the 5G bonanza gathers steam.