Cellnex Shifts Focus: Divesting Private Networks, Strengthening Core Operations

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In a surprising turn of events, Cellnex has made the decision to relinquish its private networks segment, shedding it off to Boldyn Networks. This change comes despite identifying this private networks sphere as crucial for expansion only a few years prior.

Boldyn Networks, whose influence in the neutral host platform is on the rise, has yet to disclose the exact financial terms of this exchange. However, the deal guillotine is set to drop in the first quarter of 2023, dependent on receiving the necessary regulatory permissions.

The piece on the negotiation table is notably the Finnish-based firm Edzcom, designated as an edge connectivity specialist. Within its ambit, it caters to the design, construction, and running of private 4G and 5G networks. Purchased by Cellnex in July 2020, Edzcom was geared towards bolstering Cellnex’s capabilities in the burgeoning private networks arena. This position was fortified by significant contract victories including building a private 5G network with Segula Technologies, marking the company’s debut into the automotive segment.

This new deal was perceived as a stepping stone to further integrate within the automotive industry while concurrently extending the influence of private networks across various sectors. Fast forward two short years, and Cellnex is seemingly reversing its trajectory. While the market’s growth opportunities remain vast, Cellnex seems to be reshifting its focal points back towards its fundamental business areas centered on towers and related operations. As part of an extensive purchasing streak in recent times, the company is attempting to minimize debt, leading to the offloading of Edzcom.

“Cellnex continues to evaluate the possibility of monetizing other assets to crystallize value and speed up the process to achieve S&P investment grade,” the company stated in its nine-month results release.

In the recent report, it emphasized on the asset divestitures assisting its debt-reduction initiative. This included selling its towers in France to Phoenix Tower International, garnering €631 million with another €360 million on the horizon for 2024. Additionally, a deal with Stonepeak would lead to the disposal of 49% of its businesses in Sweden and Denmark for €730 million.

Despite these drastic actions, the numbers prove that Cellnex remains robust, most noticeably becoming free cash flow positive during the period ending in September. Its CEO, Marco Patuano, affirmed that the company stands its ground regarding its short and middle-term financial objectives.

While Cellnex concentrates on its fiscal health, other entities like Boldyn Networks are eager to invest for growth prospects. The Global System for Mobile Communications (GSMA) predicts that by 2030, the revenue generation from 5G private networks will touch the $109.4 billion mark. The procurement of Edzcom will aid Boldyn Networks in securing a portion of this potential through the acceleration of its expansion in Europe.

Speaking on the acquisition, Igor Leprince, Group CEO of Boldyn Networks, celebrated the team’s capabilities and reputation. He manifested his company’s aspiration to become the partner of choice for 5G private and converged network infrastructure projects.

As a result of the Edzcom deal, Boldyn Networks positions itself strongly within the telecommunication arena, gearing up to be a name synonymous with the sector. It’s a match that we all will closely watch unfold as their tale weaves into future business acquisition narratives.

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