TowerCo (Vodafone) IPO
Vodafone’s mobile tower business, TowerCo, is expected to reach a valuation of up to €20 billion when it lists. Here, we explain everything you need to know about the new company, including when it could go public. You can also find out how to trade the TowerCo IPO with IG.
When is Vodafone’s TowerCo IPO?
There is no set date for the TowerCo IPO, but there have been reports of it happening before February 2021. The company, which has just been launched by Vodafone as a means to monetise their mobile towers, will only be operational by May 2020. The final date of the TowerCo IPO will depend on market conditions.
How to trade the Vodafone TowerCo IPO
If you want to trade the Vodafone TowerCo IPO, you can choose to do so before or after the listing. However, whether you can trade before the IPO will depend on whether a grey market is available.
Before the IPO
Before the IPO, IG could offer a ‘grey market’, which would enable you to speculate on the TowerCo share price even before the company lists. If we do offer a grey market, its price will be based on our prediction of TowerCo’s market capitalisation at the end of the first trading day. You can go long or short on this prediction – long (buy) if you think the market cap will go up and sell (short) if you think it will go down.
After the IPO
After the IPO, you can either buy TowerCo shares or speculate on its share price movements. You would buy the shares via IG’s share dealing service if you want to own the physical shares. Alternatively, you could use a spread betting or CFD trading account if you want the flexibility to speculate on upward or downward movements in the share price. When trading, you do not own the underlying asset.
What will the Vodafone TowerCo IPO value be?
It is not known what the Vodafone TowerCo IPO value will be, as Vodafone has not released much information about the listing. Speculation has been rife regarding a valuation of up to €20 billion. In 2018, Vodafone started appraising its European towers and has received several attractive offers. It said that the mobile towers ought to reach a high valuation. However, an investment bank will decide on the final valuation.
What could the TowerCo share price be when it floats?
The TowerCo share price will depend on two factors – the final IPO valuation and the number of shares TowerCo will release to the public. The share price will fluctuate after the listing as buyers and sellers enter and exit the market.
Why does TowerCo want to go public?
TowerCo wants to go public as part of Vodafone’s plans to monetise its tower assets. Vodafone could make billions from the IPO – which it needs to pay off debt. At the end of March 2019, it reported net debt of €27 billion. This figure is up 46% from the previous year. Further to this, Vodafone CEO Nick Read said that TowerCo will unlock opportunities for network sharing.
What is the outlook for TowerCo?
The outlook for TowerCo is positive as Vodafone has projected €1.7 billion in annual revenue and €900 million in earnings for its tower business. The short-term outlook will depend on the outcome of the IPO and various sell-offs. TowerCo’s long-term outlook will be closely related to its competitors’ performance and how well it’s using newly generated capital to reduce debt.
Who are TowerCo’s competitors?
TowerCo’s competitors include Deutsche Telekom (valued at €72.26 billion), Telefónica (valued at €32.71 billion) and Cellnex (valued at €11.06 billion). Cellnex is currently the largest tower network in Europe by scale (45,000 sites) but will be overtaken by TowerCo when the business launches in May 2020.
What is TowerCo’s business model?
TowerCo’s business model is to use Vodafone’s mobile towers, which will be separated into the Towerco entity, as shared infrastructure for other mobile carriers. More than 61,000 of Vodafone’s towers across 10 countries will be used to build Europe’s largest tower portfolio. The bulk of its sites are based in the UK, Spain, Germany and Italy.
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What is an IPO?
An IPO is a financial event in which a company lists its shares on an exchange. IPO is short for ‘initial public offering’. An IPO enables the public to buy or trade the company’s shares. To learn more about how IPOs work, watch this video.