The telecom landscape in Europe is rapidly evolving, with the TowerCo model leading the charge particularly in Western and Central Europe. In recent years, this model has transitioned from being a strategy for Mobile Network Operators (MNOs) to divest passive infrastructure to build capital for 4G and 5G deployment, to becoming a key element in catalyzing sustainable connectivity.

Key Developments

• TowerCo’s Increasing Role: With their ability to free up vast amounts of capital, TowerCos are enabling MNOs to focus and invest more on their core business and growth. Furthermore, the TowerCos ability to make the network rollout for MNOs more cost-effective, is significantly contributing to improving coverage and accelerating network roll-outs. Together, TowerCos are empowering the industry to continue bringing value to the final consumer.
• Build-To-Suit (BTS) Programs: This framework empowers MNOs to obtain new Points of Presence (PoP) that meet their network needs, saving them substantial resources across the site lifecycle. At the same time, it enables TowerCos to grow their tower portfolio with guaranteed returns (minimum 1 tenant) from day 1 on new sites.
• Rising Data Consumption: As data consumption and connectivity needs to grow, the urgency for new sites and a more robust network will remain a reality. The pressure on the MNOs to remain competitive is driving the demand for more competitive BTS services.

TowerCo Independence and Its Impact

Several European TowerCos, such as the partnerships between Vodafone and Vantage Towers and Deutsche Telekom and DFMG, are undergoing commercial separation and charting a course to become independent. This autonomy is crucial, to maximize the value TowerCos can infuse into the telecom sector and broader economy.

In this growing free market, collaboration will be key. MNOs will naturally seek the TowerCo offering the most competitive BTS package, driving TowerCos to differentiate and innovate.

What Makes a BTS Program More Competitive?

• Roll-Out Efficiency: Speed of roll-out is paramount. As highlighted by management consultancy Arthur D Little, the swift execution of roll-outs is the top KPI for MNOs when selecting a TowerCo partner for new site acquisition.
• Acquisition of High Value Sites: New urban locations, like rooftops, are in short supply. As the demand for this type of location increases, it is putting site owners in a powerful negotiating position. By adopting a more data-driven approach, TowerCos can optimize lease agreements, according to the  value they will get for a given site design and in turn offer more optimized rents to their tenants. Interestingly, many European site acquisition agents believe that speed in this phase can drastically improve acquisition success rates and thus secure the best locations in a search area.
• The Power of Digitisation: Embracing site digitisation is foundational for efficient asset management. When integrated correctly, this can significantly enhance operational efficiency, allowing TowerCos to roll out more competitive, all-encompassing BTS packages, including, for example, a more efficient site maintenance.

We’d Love to Hear From You! What are your predictions for the future of BTS programs in Europe? How else can they be refined for optimal competitiveness? Share your thoughts in the comments below or join the discussion on our social media channels.