Image: TDF.
Initiated since January 2019, the sale of TDF (Télédiffusion de France) could finally take a decisive turn. According to The echoes, its main shareholder, Brookfield, should sell the 45% stake in TDF it holds to the Swedish fund EQT. This would value the digital infrastructure and network operator at around 8 billion euros, i.e. the lower range of the amount expected by the seller (from 8 to 10 billion euros).
Born in 1975, the historical broadcaster of French television has had several lives. Losing its radio and television broadcasting monopolies in the mid-2000s, then going through the crises in the media world with the arrival of digital players, TDF had to diversify its activities.
The group has thus become a telecom infrastructure operator, managing and maintaining some 19,200 pylons (June 2022 figures) on which mobile telephone operators install their 4G or 5G antennas for a fee. TDF would also have, according to the economic daily, deployed more than 610,000 fiber optic sockets then marketed by the operators.
SFR, Free and Bouygues Telecom towers acquired by Cellnex
Born in the United States, this so-called TowerCo business model has enjoyed resounding success in Europe in recent years. In January 2021, the Spanish Telefonica sold the antennas of its dedicated subsidiary, Telxius, to the American American Tower Corporation (ATC) for 7.7 billion euros. The following month, Altice, SFR’s parent company, sold its TowerCo called Hivory to the Spanish giant Cellnex – ie 10,500 telecom sites in France – for 5.2 billion euros.
After having already sold part of its towers to the same Cellnex, Bouygues Telecom created, in February 2020, a joint venture with the latter, this time dedicated to the deployment and operation of its fiber optic network in France. A quantified investment, by 2027, at 1 billion euros. Cellnex had also acquired, during the summer of 2019, 70% of the capital of Iliad TowerCo, a subsidiary of Iliad, the parent company of Free. Today, Cellnex is valued at nearly 24 billion euros.
More recently, in November 2022, the British Vodafone sold its majority stake in Vantage Towers to KKR & Co and GIP (Global Infrastructure Partners) funds, valuing the company at 16.2 billion euros. Such financial operations allow operators to get out of debt, but also to find funds to finance the costly investments of the deployment of optical fiber and 5G.
Orange made the opposite choice. The historic operator has created its TowerCo, called Totem, to manage more than 26,000 telecom sites in France and Spain, its main markets. Orange then joined Ofitem, the French association of mobile telephony infrastructure operators. The latter also brings together Cellnex France, TDF, Hivory and ATC France.
TDF weighed down by its historic broadcast activity
In this favorable context for TowerCo, how can we explain the relatively low amount of the deal that is looming between TDF and the EQT fund? The echoes explains it by the group’s share of broadcasting. This historic broadcast activity still represents more than a third of its turnover. This weighs down the valuation of TDF.
In 2021, the 6.4% growth in its turnover (731.7 million euros) is above all driven by mobile telecoms (+9.5%) and the deployment of fiber (+80%) , while audiovisual revenues contracted by 1.8%.
Moreover, the TDF case would come at the end of the battle after the major deals passed on this TowerCo market, investors having already done their shopping.