KPN and Dutch pension fund ABP have agreed to form a new tower company, TowerCo. The partnership supports KPN’s “Connect, Activate & Grow” strategy by optimising the value of passive infrastructure assets while preserving strategic flexibility.
The agreement responds to rising data consumption and the rollout of new technologies. As demand grows for network expansion and densification, KPN is increasing its focus on Dutch passive telecom infrastructure to support future capacity and coverage needs.
TowerCo will consolidate the passive mobile infrastructure assets of KPN together with those of NOVEC and OTC, the latter two currently held by TenneT and ABP respectively. The combined portfolio will include approximately 3,800 towers and rooftop sites across the Netherlands.
KPN has committed to a built-to-suit programme spanning the next decade and will remain a tenant of TowerCo under a long-term master service agreement, initially set at 20 years. TowerCo intends to increase tenancy by offering access to modernised towers and rooftop locations suitable for additional operators and modern equipment.
Enhancing flexibility and synergies
The transaction gives KPN greater flexibility across a substantial portion of its mobile sites and enables operational synergies in deployment, maintenance and network optimisation. This flexibility is essential to maintain high performance, support technologies such as 5G, and extend coverage into underserved areas.
The deal will also harmonise contracts into a future-proof framework covering roughly 60% of KPN’s tower and rooftop estate, with certain lease terms being reset as part of the transaction to reflect updated commercial and operational realities.
ABP is represented by its asset manager APG. KPN will retain a 51% consolidating stake in TowerCo while ABP will hold 49%. As part of the arrangement, TenneT will divest its stake in NOVEC. KPN has agreed to an upfront cash payment of about €120 million to the current NOVEC/OTC shareholders for their stakes and the amended lease terms, subject to closing adjustments.
On a pro forma, full-year basis, the consolidated impact of the transaction on KPN’s 2024 Adjusted EBITDA AL is estimated at approximately €30 million, while the effect on KPN’s Operating Free Cash Flow is expected to be around €20 million. The transaction is not anticipated to affect employment levels and remains subject to works council consultation and regulatory approval.
Creating TowerCo is a strategic move in KPN’s roadmap, aiming to deliver improved infrastructure, greater operational flexibility and stronger financial performance—laying the groundwork for continued growth and technological progress in the Netherlands.
(Image Credit: KPN)
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