Cellnex acquires Alticom and consolidates its position in the Netherlands

Alticom's long-range network of sites hosts equipment for wireless transmission of voice, data and audiovisual content and complements the network of 758 urban and rural sites that Cellnex Netherlands already manages to date.

Cellnex Telecom has closed the acquisition of the Dutch telecommunications infrastructure operator, Alticom, from Infracapital. The operation, which involves the integration of 30 new towers and long-range sites throughout the territory of the Netherlands, amounts to an investment of 133 million euros that will provide Cellnex with 11.5 million EBITDA in 2018.

The incorporation of Alticom reinforces and consolidates the position of Cellnex Telecom among the independent telecommunications infrastructure operators operating in the Netherlands. Alticom's network of long-range sites (high-rise towers and equipment hosting capacity) hosts equipment for wireless transmission of voice, data and audiovisual content and complements the network of 758 urban and rural sites that Cellnex Netherlands already manages to date.

Due to their characteristics, Alticom sites represent a key element in the future deployment of 5G. They have the capacity - and connectivity to the fiber optic backbone - to host remote servers or "caching servers" that bring the data processing and storage capacity closer to the end users of 5G-based applications, which will multiply the traffic demand and requirements of an increasingly greater number of people and connected objects: 50,000 million in 2020.

5G ecosystem

Tobías Martínez, CEO of Cellnex, highlighted that "the acquisition of Alticom's assets in the Netherlands brings consistency and solidity to our activity in the Netherlands by incorporating a recurring business, with predictable flows in the medium and long term, while at the same time it represents a new commitment, after the acquisition of CommsCon in Italy in 2016, for the 5G ecosystem in which Cellnex is working intensively."

5G is going to mean an explosion in terms of connectivity with growth in mobile data traffic of 600% in the next 5 years (largely based on the download of audiovisual content); up to 1,000 times faster than 3G; and a latency or response speed of up to 1 millisecond (100 times lower than 4G).

"A key strategy in the deployment of 5G will be precisely to respond to the technological challenge of latency. The network architecture already raises needs such as the reduction of "cells" or coverage areas that will be served with a denser network based on distributed antenna systems (DAS) such as those operated by CommsCon; and also the approach of processing capacity, storage and connectivity to fiber for broadband content - something known as caching servers (remote servers or cache) -, to the receiver, making it possible to obtain the expected speed and response speeds. The latter is precisely one of the lines of work in which Alticom has experience and that will add know-how to the Cellnex 5G ecosystem,” Martínez continues.

Alticom's sites cover radii of 15 km, which in turn allows them to provide service and wireless connectivity to practically 60% of the sites and towers with smaller coverage radii – up to 15,200 – deployed in the Netherlands.

The Dutch market

The Dutch infrastructure market for voice and data transmission in mobility has five independent operators that manage a total of 1,500 sites, among which are the 758 that Cellnex now manages in the country and which will be added to the 30 of Alticom. These locations complement the own network deployed by the three main telephone companies in the country (KPN, TMobile and Vodafone), to which Tele2 is added, which offers its services only in 4G. The Netherlands has a total of 15,200 locations throughout its territory.

The Netherlands is one of the European countries with the highest penetration of mobile broadband based on 4G and is already working on the future deployment of 5G. A coverage that, for the four mobile telephone operators present in the country, ranges between 92% and 99%. This deployment has been carried out, fundamentally, on the basis of the already existing sites for 2G and 3G. As in most European countries, improving coverage to make the experience of mobile access to broadband content a reality in areas with a large number of simultaneous users constitutes one of the challenges for the future. In this sense, greater network density and capillarity through the deployment of “small cells” and distributed antenna systems (DAS), together with the ability to adequately serve this content in terms of speed and latency, will be vectors of growth in the Dutch market for telecommunications services and infrastructure in the coming years.