Veon agreed to sell its mobile network towers in Russia to a domestic company for RUB70.7 billion ($969 million), as the operator seeks to cash in on passive infrastructure to focus on its active portfolio and a digital services crusade.
Under the deal, Russia-based tower company Service-Telecom will acquire Veon’s subsidiary National Tower Company, which operates approximately 15,400 towers in the country.
The active network infrastructure, operated by Veon’s PJSC VimpelCom, will remain untouched by the deal.
Veon explained in a statement the move reflected its “pursuit of opportunities to realise the value of its infrastructure portfolio”.
As part of the transaction, PJSC VimpelCom and Service-Telecom sealed an agreement covering provision of tower infrastructure services, initially for eight years with an option for multiple extensions.
The pair will also join a build-to-suit programme for up to 5,000 sites by 2029.
Veon CEO Kaan Terzioglu believes the move will provide its Russian brand Beeline with the “operational and financial flexibility to serve its customers with market-leading services through one of the nation’s largest and most technologically-advanced mobile networks”.
The deal also unlocks capital for Veon to invest in “critical aspects” of active network and digital services, he explained.
Closure of the deal is expected in Q4, subject to regulatory approvals.