Vodafone and Telefónica commercialise Cornerstone, the UK’s largest tower company

Vodafone and Telefónica commercialise Cornerstone, the UK’s largest tower company

Monday, 11 January 2021

Vodafone Limited ("Vodafone UK") and O2 Telefónica UK Limited ("O2 UK) announced today that they have signed agreements to commercialise Cornerstone Telecommunications Infrastructure Limited ("Cornerstone"), the 50:50 owned joint venture company that owns and manages their passive tower infrastructure in the United Kingdom. 

Vodafone UK and O2 UK have each entered into long-term Master Services Agreements (each, an "MSA") with Cornerstone, which have initial terms of 8 years from 1 January 2021, with three 8-year renewal periods, and which establish Cornerstone as a preferred supplier of new sites for both operators. 

Vodafone intends to transfer its 50% shareholding in Cornerstone to Vantage Towers in January 2021. 

Key highlights

  • #1 tower infrastructure company in the UK with c.14,200 macro sites with a portfolio lease up rate of 2.0x and c.1,400 micro sites 
  • Adjusted FY20 pro forma adjusted EBITDA after Leases ("Adjusted EBITDAaL") of £111 million 
  • Commitments for c.1,200 new macro sites by FY25 and c.1,950 new passive tenancies on existing sites by FY24, with an expected additional run-rate. Adjusted EBITDAaL contribution of approximately £17.5 million by FY26 (100% basis) 
  • Attractive medium-term revenue and recurring free cash flow growth outlook, supported by new build macro sites, committed new passive tenancies and rural white spot coverage obligations
  • Opportunity for additional sites and passive tenancies with Cornerstone well placed to capture a significant portion of the additional market tenancies required for densification and coverage in the UK

Future operations

The existing senior management team, led by Rhys Phillip, CEO, will continue to lead Cornerstone through and beyond this period of transition and will remain focussed on providing an excellent customer experience while seeking opportunities to grow the business and increase shareholder value.

Cornerstones relationships with key partners, suppliers and landlords remain unchanged by this announcement and we look forward to working with them to champion Digital Britain.

Rhys Phillip, CEO Cornerstone commented “This is a great step for Cornerstone as we continue our evolution and provides an opportunity to play an even more effective role in the development of Digital Britain”

For more information email 

To read the Vodafone Group press release, please click here.

To read the Telefónica press release click here.

To read the Vantage Towers statement click here.

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