Veon agrees to sell cell towers in Russia for $970 mln

MOSCOW. Sept 6 (Interfax) - Telecom group Veon, which owns Russian mobile provider Vimpelcom, has agreed to sell its cell towers in Russia to Service-Telecom for 70.65 billion rubles ($970 million), the group said in a press release.

The transaction involves the sale of 100% of National Tower Company (NTC), a subsidiary of Veon that operates a portfolio of approximately 15,400 mobile network towers in Russia. All of the active mobile network infrastructure currently operated by PJSC Vimpelcom and the majority of the rooftop towers will remain with the company, Veon said.

The deal is subject to approval by Russia's Federal Antimonopoly Service (FAS). It is expected to be closed in the fourth quarter of 2021.

Most of the money for the deal will be paid upon closing and in the first months of 2022, Vimpelcom told Interfax. "Some payments will be deferred for three years, but they are relatively small in the context of the deal," the company said.

Under the terms of the deal, Vimpelcom and Service-Telecom have entered into a long-term master agreement regarding the provision of tower infrastructure services for an initial period of eight years, and multiple extensions of eight years at the discretion of Vimpelcom. Both parties will additionally enter into a new build-to-suit program comprising of up to 5,000 sites by 2029.

"The deal will take our partnership with Service-Telecom Group to an absolutely new, federal level of cooperation, which will make it possible to improve the speed and efficiency of the development of Vimpelcom's network at the national level. We also expect that an independent player of such scale will be able to have a general favourable influence on the whole Russian tower infrastructure market," Vimpelcom CEO Alexander Torbakhov was quoted as saying.