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EY Parthenon European Wireless Infrastructure Report November 2020 (PDF)
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EY Parthenon European Wireless Infrastructure Report February 2022 (PDF)
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EY Parthenon European Wireless Infrastructure Report March 2023 (PDF)
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EY Parthenon European Wireless Infrastructure Report May 2024 (PDF)
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Independent TowerCos will continue to play a significant role, underpinning modern digital economies in Europe for the long term.
Two questions to ask
How does the share of independent TowerCos in Europe compare to other regions globally?
What benefits can independent TowerCos provide with regard to investment and efficient use of communication infrastructure?
Outsourcing of wireless infrastructure to independent TowerCos is a growing trend in Europe that is in line with the model prevailing globally. It delivers a number of benefits to mobile network operators (MNOs), the wider wireless sector and, ultimately, the consumer.
Independent TowerCo benefits to MNOs, wireless sector and consumers
Independent TowerCos specialize in operating neutral host, “passive” wireless network infrastructure such as mobile towers. Sharing of towers with multiple tenants reduces overall cost for mobile operators, helps improve coverage and reduces consumer prices.
Long-term international investors in European infrastructure value the benefits of the TowerCo model, resulting in an active M&A market.
The average number of wireless network operators sharing an independent tower is 2.4, compared to 1.3 for MNO-controlled towers. Independent TowerCos make it easier and cheaper to roll out new networks.
A typical location of a wireless network operator (also point of presence) managed by a TowerCo is circa 40% more efficient than one managed by an MNO, resulting in economic savings of €31b across Europe between 2019 and 2029.
Greater outsourcing to independent TowerCos could release an estimated €28b of capital, which MNOs can reinvest in their networks, such as to improve coverage and accelerate 5G rollouts. Since 2018, independent TowerCos have helped release around €3.5b in capital via acquisition of various tower portfolios from MNOs.
There is a trend of MNO-controlled TowerCos being created throughout Europe (e.g., Vantage Towers, CK Hutchison Networks, Orange TowerCo), which is seen as an interim step toward full independence of their tower portfolios.
Independent TowerCos are playing a key role in enabling 5G rollouts and the continued expansion of mobile network coverage.
While the share of independent TowerCos in Europe has increased in recent years (from 13% in 2014 to 17% in 2018 and 35% in 2021), it remains low compared to other regions (e.g., 90% in the US, 55% in Central and Latin America, and 52% in India). A further increase in Europe would help deliver the benefits of cheaper and better mobile networks.
The new European Electronic Communications Code (EECC) reflects the pro-competitive nature of independent TowerCos and is expected to benefit them through increased certainty for the wholesale infrastructure sector.
Since 2018, the share of independent TowerCos in Europe has increased from 17% to 20%, helping to release around €3.5b of capital in the process via acquisition of tower portfolios from MNOs.
Information for this report was sourced from European Wireless Infrastructure Association (EWIA) member companies, analyst reports, Towerxchange website and EY-Parthenon analysis, February 2022. The trends described in this report are expected to continue as demonstrated by market activity which was ongoing at the time of publication and is not included in this report’s figures.
Olivier Wolf and Ulrich Loewer of EY-Parthenon authored this article.
Summary
EY-Parthenon and the European Wireless Infrastructure Association conducted a study on the economic contribution of the European mobile tower sector. The study examined the important role of independent wholesale wireless infrastructure provider (independent TowerCos), which will continue to play a significant role, underpinning modern digital economies for the long term. The study aims to foster a better understanding of the benefits that independent TowerCos can provide in generating investment and promoting efficient use of communication infrastructure and the role they can play in delivering the EU’s Gigabit Vision 2025 and other government targets, e.g., mobile coverage and 5G rollouts.
EY-Parthenon Partner and Strategy Sector Leader, Technology, Media and Entertainment, and Telecommunications, Ernst & Young LLP
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