# Vodafone and Telefonica to commercialise UK’s largest tower company, Cornerstone

- Link: https://www.directorstalkinterviews.com/vodafone-and-telefonica-to-commercialise-uks-largest-tower-company-cornerstone/412952579
- Published: 2021-01-11T07:33:36+00:00
- Author: Amilia Stone

**[Vodafone Group Plc](https://www.directorstalkinterviews.com/ftse-company/vodafone-group/vod.l)**(
[LON:VOD](https://www.directorstalkinterviews.com/ftse-company/vodafone-group/vod.l))
UK subsidiary, Vodafone Limited and Telefonica UK Limited has announced the commercialisation
of Cornerstone Telecommunications Infrastructure Limited, the 50:50 owned joint 
venture company that owns and manages their passive tower infrastructure in the 
United Kingdom.

Vodafone UK and TEF UK have each entered into long-term Master Services Agreements
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.

**Key highlights**

·   #1 tower infrastructure company in the UK operating c.14,200 macro sites and
c.1,400 micro sites

·   Extends Vantage Towers’ portfolio to c.82,000^([1]) macro sites and its geographic
presence in Europe to 10 markets, with leading positions in 9 of them

·   Adjusted FY20 pro forma adjusted EBITDA after Leases of £111 million, thereby
adding €62 million^([2]) to Vantage Towers’ pro forma aggregated Adjusted EBITDAaL
based on its 50% shareholding in Cornerstone

·   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 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

·   Cornerstone to maintain leverage of 3.0-4.0x Net Financial Debt / Adjusted EBITDAaL,
by distributing 100% of excess cash with additional distributions from time to time
to maintain leverage

> **Vivek Badrinath, Vantage Towers Chief Executive, commented:**
> “Cornerstone is a great addition to the Vantage Towers portfolio. Cornerstone 
> is exactly the type of high quality grid we like to own: a number one market position,
> and two strong anchor tenants with network sharing agreements in place for whom
> we are the preferred supplier. We look forward to working with our anchor tenants
> to power the UK’s digital transformation, enabling the roll-out of 5G networks
> to benefit business and consumers and ensuring greater mobile coverage for all.”

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

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