Telecoms group Orange kicks off the carving-out of its towers in Europe
By Mathieu Rosemain
PARIS, Dec 4 (Reuters) - Orange ORAN.PA said it planned to carve out its mobile towers in most European countries where it is present, in a move aimed at shoring up the telecom group's value as tough competition in the region has hampered its growth and margins.
France's former telecoms monopoly said that it owned about 40,000 towers of its mobile network on the continent. The first so-called national "TowerCos" will be created in France and Spain, the company's two biggest markets, in 2020.
The Paris-based company will retain control over all these new entities and is hoping to eventually merge them into a European company. This entity will also be majority-owned by Orange.
"It is a vehicle that will enable us to play a possible role in consolidation at European level," Chief Executive Officer Stephane Richard said in a call with reporters on Wednesday.
Orange is jumping on a bandwagon of European companies that are considering selling part of their mobile networks on the back of sky-rocketing valuations for infrastructure assets, and a growing appetite for them from groups such as U.S. investment firm KKR KKR.N and Spain's Cellnex.
The announcement came as part of Orange's new five-year strategic plan.
New financial targets include a growth of group core operating profit between 2% and 3% by 2023 and a target for its organic cash flow from telecoms activities to grow from a base of more than 2 billion euros ($2.20 billion) in 2019 and 2020 to between 3.5 and 4 billion euros by 2023.
($1 = 0.9073 euros)
(Reporting by Mathieu Rosemain; Editing by Sudip Kar-Gupta)
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