Vantage plans investor windfall after Vodafone spinoff 

Vantage is gearing up to list in Frankfurt at the start of next year

Mobile phone tower
Vodafone is creating Vantage by splitting off its mobile masts business Credit:  THILO SCHMUELGEN/ Reuters

The mobile towers giant being spun out of Vodafone has promised bumper shareholder payouts in its first year as it fires up plans for growth. 

Vantage Towers expects to offer dividends worth €280m (£251m) next year after listing in Frankfurt. 

The update came as Vantage gave its first presentation to investors and unveiled a €1bn war chest for takeover targets. 

The company is poised to become a challenger to Cellnex, the Spanish masts company that has been buying up European telecoms infrastructure.  

Vantage, which has 68,000 towers spread across nine European companies, expects annual adjusted profits to be about €540m on revenues of between €955m and €970m. 

Chief executive Vivek Badrinath said it was already one of the backbones of Europe's digital transformation and would play a key part in upgrading mobile networks to ultra-fast speeds.

"There is an enormous growth in mobile data and there is the rollout of 5G," he added. "This gives us significant growth opportunities. 

"We have the potential to offer space on our sites to an increasing number of mobile operators, and that will help us to boost what we consider one of our key indicators which is the tenancy ratio."

Vodafone has created Vantage by carving out its mobile infrastructure business into a separate company. 

The move is part of a growing trend among telecoms operators to cash in on their infrastructure as investors seek their stable, long-term returns.

Vodafone will hold a majority stake and become one of the biggest customers of Vantage, which could be worth more than €20bn.

The FTSE 100 company will use the money to pay down its €43bn debt pile.

Vantage plans to capitalise on huge demand for data, and the race to upgrade mobile infrastructure to 5G, by increasing the size of its tower network and renting out capacity to mobile operators. 

That includes plans to increase its tenancy ratio  - the amount of operators renting space on its network - from 1.38x to 1.5x. 

It already has plans in place for 13,400 new tenancies, but needs a further 2,100 to hit its target. 

Vodafone is also in advanced talks with O2 owner Telefonica to roll its 50pc slice of their UK towers joint venture CTIL into Vantage.