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Telstra to split business in three and “monetise” $3.3bn towerco

Andy Penn Telstra.jpg

Australian telco Telstra (TLS.AX) is to split its business into three units, according to reports from Reuters.

The business will be divided into infrastructure assets, radio access network and spectrum assets, and mobile towers, with plans to “monetise” the mobile tower assets due to “strong demand and compelling valuations for this type of high-quality infrastructure”.

Goldman Sachs has valued the towers business at AUD$4.5 billion (US$3.3 billion).

The Sydney Morning Herald has reported that InfraCo Fixed, the internal working name of Telstra’s infrastructure business, could be worth “up to AUD$34 billion”. It holds the company's ducts, fibre, data centres, subsea cables and exchanges.

Reuters said today the division of activities will take 12 months, with a preliminary completion date of December 2021, subject to regulatory approvals.

CEO Andrew Penn (pictured) told media: “The challenges and disruptions of the last six to 12 months have reinforced the increasing value of infrastructure assets globally. Our proposed new corporate structure reflects this new world.”

The news led to a spike in Telstra’s share price on the ASX on 12 November, rising 3.1% in 24 hours at the time of writing.