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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.
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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 with more than €51b in tower deals (since 2019).
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 was estimated to release €28b of capital, which MNOs can reinvest in their networks, such as to improve coverage and accelerate 5G rollouts. Since 2019, independent TowerCos have helped release circa €26b in capital via acquisition of various tower portfolios from MNOs with more expected.
Independent TowerCos are playing a key role in enabling 5G rollouts and the continued expansion of mobile network coverage. In addition to tower acquisitions, European Wireless Infrastructure Association (EWIA) members alone have invested €2.0b per annum Capex in new deployments, site reinforcement and maintenance since 2021.
The share of independent TowerCos in Europe has increased in recent years (from 13% in 2014 and 17% in 2018 to and 35% in 2021 and 39% in 2023), and is expected to continue to trend toward the global level of circa 54%.
Independent TowerCos have enabled infrastructure sharing and efficient deployments, key principles of the anticipated Gigabit Infrastructure Act.
Since 2018, the share of independent TowerCos in Europe has increased from 17% to 39%, helping to release around €26b 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, May 2024. 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, Ulrich Loewer and James Langlands of EY-Parthenon authored this article.
Summary
EY-Parthenon and the European Wireless Infrastructure Association (EWIA) have conducted a series of studies on the economic contribution of the European mobile tower sector. The studies examine 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 studies aim 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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