Market Report: Investors buzz over Vodafone’s giant phone masts sell-off

A big week for Vodafone shares continued to take shape today as investors got their first proper look at the phone masts business due to be sold off next year.

The sprawling Vantage Towers operation, which could be valued at about £14 billion when the flotation takes place in Frankfurt, is expected to be attractive to institutions as a play on the rollout of 5G in Europe.

It boasts a network of 68,000 sites across nine countries, with a number one or two market position in all but one of its territories.

A capital markets day hosted by Towers CEO Vivek Badrinath today highlighted the new company’s income generating potential, with a promised pay-out ratio worth 60% of free cash flow. Badrinath said: “The growth potential in the towers sector is fuelled by the requirement for data as well as the roll out of 5G technology and new and wider network coverage obligations across Europe. These factors will increase the number of tenants renting space on our towers.”

Vodafone shares still fell 3% or 4p to 123.8p today, having rallied sharply in recent days on the back of the positive vaccine news lifting the wider market. Yesterday, the mobile phone giant announced an interim dividend of 4.5 cents a share after a resilient half-year results performance in the face of disruption to its roaming revenues.