Polsat Group decided to sell a controlling stake in Polkomtel Infrastruktura to Cellnex Telecom for ca. PLN 7.1 bn. The transaction is expected to be concluded by the end of October 2021, subject to the fulfilment of the agreed conditions precedent
Following the review of various strategic options initiated in September 2020, Cyfrowy Polsat S.A. and Polkomtel sp. z o.o. (jointly referred to as “Polsat Group,” the “Group,” or the “Sellers”) have concluded a conditional share sale agreement concerning the sale of a 99.99% stake in Polkomtel Infrastruktura sp. z o.o. (“NetCo”), a subsidiary of Polsat Group responsible for part of the technical network infrastructure, with Cellnex Poland sp. z o.o. (the “Buyer”), a subsidiary of Cellnex Telecom, S.A. In particular, NetCo is the owner of the passive and active access layers of the mobile telecommunication infrastructure of Polsat Group, consisting of approx. 7 thousand sites, approx. 37 thousand various systems on-air (incl. over 1 thousand of 5G-equipped systems) and a transmission network.
Polkomtel’s core network and all frequencies crucial for providing first-to-market real 5G as well as 2G/3G/LTE services will remain in Polsat Group’s possession, as the Group, as the Plus network operator, intends to continuously deliver state-of-the-art communication and content services to its retail, business and wholesale customers.
“Our intention to partner with Cellnex in the further development of our mobile network is intended to allow for even faster and more cost-efficient deployment of modern connectivity services for our customers,” says Mirosław Błaszczyk, CEO of Cyfrowy Polsat and Polkomtel. “In order to work, learn or entertain themselves, our customers need reliable networks which will require more and more 5G-equipped sites,” he adds.
“We believe active and passive network sharing is crucial for the provision of mobile connectivity in the future and mobile players have to follow this direction in order to provide high end-user experience,” says Maciej Stec, vice-president of the Management Board responsible for strategy in Cyfrowy Polsat and Polkomtel. “Our partnership with Cellnex allows for densifying the network of sites used by our customers by applying a cost-efficient approach. As a leading European telecommunication infrastructure provider Cellnex will look to optimize mobile network investments in Poland with benefits for our customers and the environment we live in.”
“We were very intrigued by the innovative and open approach presented by the Polsat team. The decision to put up for sale both the passive, and the active layers of the network came as a novelty but we see a lot of business rationale in this approach. It clearly exemplifies our commitment to evolving the traditional tower operator model towards an integrated telecommunications infrastructure management model. Therefore, we are very excited to start working with the Polsat team and we believe our engagement in managing a portfolio of Polish sites brings a lot of synergic benefits for all parties involved. The cooperation model agreed with the Polsat team guarantees an interest alignment between all parties. We are committed to participate in continued development of 5G technology in Poland and we welcome additional tenants interested in working with us,” says Tobias Martinez, CEO of Cellnex Telecom.
The transaction values 99.99% of NetCo and its assets at ca. PLN 7.1 bn and it is conditional upon: (i) the Sellers obtaining consents required under the financing documentation of the Sellers, as well the release of security interests encumbering the shares to be sold; and (ii) the Buyer obtaining an antimonopoly clearance from the President of the Office of Competition and Consumer Protection (the Polish anti-trust authority). Once the conditions precedent are met, Polsat Group and Cellnex Telecom will sign a Master Services Agreement obliging NetCo to provide specified services to Polsat Group for 25 years (subject to renewal for subsequent 15-year terms). The cooperation will be based on a monthly remuneration dependent on the number of sites and active infrastructure systems used and additionally ordered in the future by Polsat Group. Under the contractual obligations, Polsat Group is committed to order in NetCo a certain number of incremental sites and additional emission systems under specified timeframes. The Master Service Agreement will involve a detailed Service Level Agreement, while the way the contracts will be constructed guarantees the alignment of interests of all parties.
The strategic interest of the partnership is based on a concept of active and passive infrastructure sharing, where the mobile network operator is predominantly interested in end-user experience, while the infrastructure owner is responsible for delivering ordered network capacity in the most cost-efficient manner. First, this approach will strengthen the investment capacity of Polsat Group, which has already entered a new investment cycle with the rollout of the first 5G network in Poland and will seek additional sites to expand the coverage of the new technology. Second, it is open to cooperation with additional tenants with an intention to achieve higher cost efficiency of network rollout in the future. Third, the partnership will provide a higher customer experience, faster deployment of new technologies and better optimization of existing tower portfolios in Poland.
Polkomtel Infrastruktura sp. z o. o. is a company owning passive and active components of a mobile telecommunication infrastructure initially built by other subsidiaries of Polsat Group. In the full year ended December 31, 2020, the company generated revenue of PLN 957.8 million, EBITDA of PLN 672.5 million[1] (IFRS16 based), EBIT of PLN 116.1 million and invested PLN 433.0 million (cash CAPEX, including the cost of the first stage of 5G network rollout).
Greenberg Traurig Grzesiak sp.k was the legal advisor of Cyfrowy Polsat and Polkomtel, with Trigon acting as their financial advisor.
[1] Please note historical data as reported by Polkomtel Infrastruktura sp. z o.o. does not reflect terms and conditions of the Master Services Agreement, as agreed between both parties.
