Sells another minority stake in its joint-owned tower unit, Cornerstone, this time to infra investor Equitix
The UK operator looking to take the crown from BT didn’t have the best third quarter. Virgin Media O2 reported a 2.4% year-on-year decrease in revenues to £2.7 billion (€3.236 billion) and a 4.1% fall in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) to just over £1 billion.
During the quarter, the operator lost 15,300 mobile contract customers and 221,300 IoT “very low value connections” after introducing minimum charge pricing.
However, the fixed-line customer base rose to 5.8 million – more than a 40% increase in gross additions in nexfibre’s expanded footprint compared to Q2.
nexfibre is a joint venture between InfraVia Capital Partners, Liberty Global and Telefónica – the latter two are Virgin Media O2’s parent companies. nexfibre is financed by £4.5 billion of equity and debt investment.
Its mission is to become a wholesale operator on a national scale. As of September 2024, it has passed 1,550,000 premises, primarily in Cheshire, Derbyshire, Durham, Kent and Lancashire. For comparision, in July BT Openreach announced it has passed 15 million premises.
The operator announced it expects to make £186 million from selling an 8.33% stake in its tower unit, Cornerstone, to infrastructure investor Equitix. This will leave Virgin Media O2 with a 25.01% share in Cornerstone once the deal is completed.
The tower business owns and operates about 20,000 base station sites used by itself and Vodafone UK. Virgin Media O2 says the proceeds from the sale will be used to improve 4G coverage and expand 5G’s footprint.
Last November, Virgin Media O2 sold a 16.67% stake in Cornerstone for £360 million GLIL Infrastructure
Lutz Schüler, CEO of Virgin Media O2 (pictured), commented, “This additional minority stake sale follows the same logic and strategic rationale as our previous deal, allowing us to successfully monetise our infrastructure while retaining a controlling share in an important asset.
“Equitix is another strong partner to have onboard that clearly sees the long-term value in Cornerstone at a time when we are investing billions of pounds to enhance 4G coverage and bring 5G to new areas of the country.”