Telco incumbent Spark has sold off the majority of its mobile tower site subsidiary TowerCo to Canadian infrastructure investor Ontario Teachers' Pension Plan Board.
The deal is worth $900 million, and expected to be completed in the first half of the 2023 financial year, pending Overseas Investment Office approval.
Spark's chair Justine Smyth said the money will go to shareholders and be spent on future growth opportunities, and maintaining an appropriate investment grade debt rating.
With a total valuation of $1.175 billion, TowerCo has approximately 1263 sites with passive infrastructure, according to Spark.
Most of the sites or 70 per cent are full towers, with 15 per cent on buildings and another 15 per cent on street lights.
TowerCo was created by Spark in February this year, and is projected to bring in a $35 million earnings before tax for 2023.
On top of keeping a 30 per cent share of TowerCo, Spark has committed to a 15-year access agreement with the company.
Furthermore, Spark chief executive Jolie Hodson said a build programme of 670 new sites over a decade is underway.
“A standalone TowerCo business with sole responsibility for passive mobile infrastructure will have a single-minded focus, delivering efficiency, service innovation, and improved speed to market.
This is going to be particularly important when you consider the 5G build programs of tomorrow will be very different to the 4G ones of the past, requiring many more, smaller sites, closer to the customer, and greater overall densification,” Hodson said.
Telco competitor Vodafone New Zealand, owned by Infratil and Brookfield Asset Management, is also looking at selling its passive tower infrastructure.
Vodafone has just under 1500 cell sites, estimated to be worth $1.5 billion in total.