Tuesday, September 10, 2019 12:43 p.m. EDT
MADRID (Reuters) – Telefonica said on Tuesday it would speed up a plan to make money from its tens of thousands of mobile tower sites and offer an early retirement option and retraining to its unionized Spanish workforce.
Europe’s third-biggest telecom company, like many peers, has been struggling to post strong growth in an increasingly crowded market and its share price has fallen 10% this year.
After a board meeting where the proposals were discussed, Telefonica said in a statement it owned around 50,000 mast sites outside its main tower unit Telxius, and wanted both to share more infrastructure and “capitalize on interest in our infrastructure both from public and private market participants”.
Communications masts have long been a popular investment for private equity firms because of their steady cash flows. Telefonica calculated those 50,000 sites could generate core earnings of around 360 million euros ($397 million).
Telefonica said it aims to monetize a portfolio of these assets within the next 12 months and was considering options including selling to Telxius some of the sites held by other units.
Last year, Telefonica sold a 10% stake in Telxius to Zara clothing chain owner Amancio Ortega for 378.8 million euros, as part of a drive to cut debt which was still more than 2-1/2 times core profit as of June.
Employees over 53 years old in Spain would be eligible for early retirement, which would cost approximately 1.6 billion euros before taxes and allow savings worth around 220 million euros from 2021, the company said. The conditions of the early retirement plan are subject to negotiation with the unions and the two sides will meet on Wednesday.
It said it also planned to double its training budget and teach new skills in areas including security, robotisation, analytics and web development to more than 6,000 employees.
Shares had traded down further on Tuesday but rallied after the announcement to close 0.4% higher on the day at 6.69 euros.
(Reporting by Isla Binnie; Editing by Lisa Shumaker)