‘I won’t have Vodafone interfering in my life’

Last year in the UK the mobile masts arm of Arqiva, which rents access to all four operators, was acquired for £2bn. The buyer, Cellnex, went on to secure a €10bn pan-European takeover of masts owned by CK Hutchison, the owner of Three, including its UK sites.

Vodafone’s UK masts, which are shared with rival O2, are to be rolled into Vantage under a deal thrashed out only last week.

They will add €62m of annual earnings to take the total pot to €742m. At the same valuation maths as Telxius that would make Badrinath’s new venture worth getting on for €23bn.

“The sector is exciting,” says the 51-year-old, who climbed the ranks of France’s former state operator, Orange, then made a detour into the hotel business with Accor, before joining Vodafone in 2016. “There is this big trend towards the commercialisation of towers and Europe is maybe 20 years behind the US.”

Vodafone, Europe’s biggest mobile operator, played no small part in creating that gap. Its previous chief executive, Vittorio Colao, was a firm opponent of selling off what he saw as the family silver.

Read clearly sees things differently, and Badrinath says the mobile world has changed such that owning and controlling masts is not so much of a competitive advantage.

“It was a chief technology officer on the mobile side of Orange in 2004,” he says. “At that point in time the battle was probably still around coverage.

“But once the main operators reached 90pc-plus coverage they lost the ability to differentiate just because they own a mast site. Now it is more efficient economically, operationally and for the environment to share the load of heavy duty infrastructure.”

Badrinath’s task is to convince more operators across its 10 European territories mobile industry to rent from it. While its relationship with Vodafone, which will remain a majority shareholder, is guaranteed, it needs to deliver growth by increasing the average number of tenants on each of its masts. The figure is currently 
less than 1.5.

Vantage is confident the sheer demand for mobile data – he expects an increase of 2.4 times by 2025 – will boost occupancy. Developing 5G networks to cope will require denser patterns of masts, especially in cities, and sharing space will make sense for all.

“It’s not just that we’re taking to the bank the number of contracts that we have for the existing networks,” says Badrinath. “There is growth for a number of reasons. There is absolutely no doubt that 5G will entail the need for more network and more capacity. Governments are selling spectrum on the condition that coverage is developed too.”

Some mobile operators claim equipment breakthroughs have reduced the need for more masts, but even with its current 86pc revenue dependence on Vodafone, Vantage has more than 7,000 in the works. Badrinath says the question is one of timing, not need.

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