Singtel may sell Optus telecommunications towers

An Optus telecommunications tower.

Singaporean telco Singtel is believed to be considering a $2bn sale of its Optus telecommunications towers.

Sources say Bank of America did a scoping study for a sale, as first reported by DataRoom online on Thursday, but the bank declined to comment.

Requests for proposals are said to have been sent out to investment banks for mandates to sell the assets, with a sale to fund growth and the rollout of its 5G network.

Talk surfaced late last year that a divestment could be afoot.

An Optus spokesperson said on Thursday that it was committed to delivering a best-in-class mobile network that would meet customers’ requirements for coverage and performance.

“As we roll out our 5G network nationally, we will assess various options to optimise our operating model, including technology and financing,” the spokesperson said.

Australian telecoms providers remain under pressure to find ways to fund the rollout of 5G infrastructure. Late last year, Optus tower and satellite assets were in focus, while some had earlier wondered whether Telstra would explore options for its mobile phone towers.

Most believe that Telstras’s towers were previously off limits, but the telco now needs cash for investment.

Optus earlier said it had no plans to sell its satellites, but others have believed for some time that a sale is on the cards.

It remains unclear whether the satellites are now for sale.

The Optus satellites were on offer previously through Morgan Stanley and, given the interest last year by infrastructure investors in Superloop and Vocus, some believe now is the time to place them on the market as a sale could yield a strong price.

No doubt investment banks will be pitching ideas to the telco at a time when the sector remains hot and infrastructure investors are struggling to find mainstream investment opportunities.

Private equity firms are also expected to show a keen interest.

Optus Satellite describes itself as having the largest fleet of satellites in Australia and New Zealand, and any likely buyer could be a private equity firm or an infrastructure fund.

Optus owner SingTel launched a strategic review of its Optus Satellite business in 2013, and an initial public offering was among the considerations for what then was considered to be a $2bn operation.

Intelsat SA and a consortium made up of Blackstone, TPG Capital and Malaysia-based MEASAT Global bid for the assets, and Kohlberg Kravis Roberts and Apollo were also reportedly looking, but walked away when the price was too high.

The sale plan was then abandoned.