Orange took the wraps off TOTEM, an independent European tower company established to host passive mobile infrastructure assets, in a move aimed at driving revenue growth and operational efficiency.
In a statement released alongside its latest financial results, Orange said it was reinventing its operator model by creating the tower company, which will be run by a fully independent management team to be appointed in the first half of 2021.
It will then officially launch operations by the end of the year.
From the outset, the company’s tower portfolio will consist of more than 25,000 sites in France and Spain, Orange’s two largest markets. It will then explore the possibility of integrating other assets from within its European footprint.
In France, TOTEM will operate 17,000 macro sites, a 55 per cent mix of towers and 45 per cent rooftops, and in Spain it will handle 8,000 sites, split 50:50 between towers and rooftops.
Orange said the co-location rate for combined assets in France and Spain should increase from 1.3-times in 2020 to 1.5-times by 2026, while 3,000 sites should be constructed over an eight-year period based on demand.
TOTEM will also host and deploy new sites for other operators and it expects demand to grow across Europe as digitalisation continues to accelerate.
The Cellnex route
At the end of 2019, Orange first outlined plans [1] to separate its tower assets in the bulk of its European operations into national units, before creating a company to house them.
However, the company has been slow to act, with TOTEM coming to the fore more than a year later.
Its move comes as several European operators have moved to sell off their tower assets to specialist Cellnex and private equity companies, and then lease back the infrastructure to free up cash.
Orange numbers
Revenue in Q4 2020 was flat at €10.9 billion, as 5.2 per cent year-on-year growth in Africa & Middle East and a 1.6 per cent rise in France was offset by weakness across Europe and its enterprise division.
Its mobile customer base grew 3.3 per cent to 214.1 million at end-December and there was 2.7 per cent increase in convergent customers, driven by strong European demand.
Net debt reduced €2 billion to €23.5 billion, mainly due to a €2 billion tax refund [2].
The company added it would propose a 2020 dividend of €0.70 per share, plus €0.20, also linked to the tax refund.
It did not reveal a net income figure for the quarter.
[1] https://www.mobileworldlive.com/featured-content/home-banner/orange-talks-tower-split-transformation-targets
[2] https://www.mobileworldlive.com/featured-content/home-banner/orange-preps-belgium-buyout-splashes-tax-refund-cash
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