News of a significant number of cellular masts and towers changing hands in Europe might not appear disruptive to our core target audience, but the resultant cash injection into Europe’s most lucrative video market is certainly worth keeping tabs on. It comes as Arqiva retreated from the telcoms sector in dramatic fashion this week with a huge £2 billion ($2.45 billion) sale of infrastructure assets to Cellnex, meaning the UK company emerges as a pure broadcast technology player.
But how relevant is the remaining company? Arqiva’s sole business now lies in providing TV and radio technology to broadcasters as well as international content owners. It builds and manages DTT infrastructure on behalf of broadcasters, much like TDF in France.
The company owns some 1,500 broadcast transmission sites and 5 teleports, supported by its global fiber network which arguably represent Arqiva’s most valuable assets. The press release made no mention of fiber being part of the sale, citing only “telecoms infrastructure and related assets”. Faultline asked Arqiva to elaborate on its related assets, revealing crucially that its fiber network in the central London borough of Hammersmith & Fulham comes as part of concessions to use street infrastructure, like lampposts, as part of the deal. The region is home to some 180,000 people across 84,000 homes, condensed into 6.3 square miles.
Arqiva works with independent fiber provider CityFibre, part of a wave of companies installing fiber to buildings and cities in the UK, in response to operator fears that OpenReach – the wholesale fiber arm of the BT Group – is too dominant to create healthy price competition, and too close to BT’s mobile arm EE (though regulator Ofcom has taken successive steps to separate them). CityFibre has certainly benefited from the appetite for new providers, forming an alliance with Vodafone under which the pair will co-invest in fiber for home connectivity and small cell backhaul, with the MNO acting as the anchor tenant.
Arqiva won the concession contract at Hammersmith & Fulham back in 2014 and has since collaborated with CityFibre to bring 5G-ready small cell infrastructure to the borough as part of a 15km high density fiber network costing £2.5 billion to provide backhaul for 5G rollouts.
Tower powerhouse Cellnex, which operates across Europe as well as the UK, will take control of Arqiva’s 7,400 cellular sites with the right to market an additional 900 sites. Through the deal, Cellnex inherits contracts at all four UK mobile network operators (Vodafone, O2, EE and Three), including deals with the duo of ventures operated between them, telecoms infrastructure firm Cornerstone and MBNL (Mobile Broadband Network Limited).
Arqiva also jointly owns Freeview channel provider Digital UK, alongside the BBC, ITV, Channel 4 and Arqiva. Arqiva handles day-to-day technical management of the Freeview Electronic Programme Guide (EPG) for which Suitest, a Czech quality assurance start-up, has enabled remote automated testing.
“This agreement provides both stability and a focus for our future as we concentrate on the provision of broadcast infrastructure, end-to-end networks and connectivity solutions for our TV and radio customers, international content owners, data network providers and utilities,” commented Arqiva CEO Simon Beresford-Wylle.
“The majority of the sale proceeds will be used to pay down debt in Arqiva’s capital structure, securing the long-term sustainability and financial security of the UK’s broadcast infrastructure,” it states.
Re-investing the cash in IP infrastructure to support the broadcast industry’s video streaming ambitions would be our advice.
It’s worth noting that Arqiva also gave up on Sigfox, the low power wide area network protocol found in the IoT ecosystem – a move we can now see was a precursor to its larger wireless exodus.