Fast-growing Cellnex snaps up private LTE specialist Edzcom in buying spree
Spanish infrastructure company Cellnex Telecom has acquired Finnish private networking specialist Edzcom for an undisclosed fee. The deal was announced in the company’s six-month business update for the period to the end of June, alongside the purchase of Arqiva’s Telecommunications division in the UK earlier this month.
A statement said: “Cellnex [has] acquired 100 percent of the shares of Finnish start-up Edzcom, specialised in edge connectivity solutions, especially focused on the development and implementation of private LTE networks, which are key to rolling out 5G, in business critical processes in industrial complexes and environments such as ports, airports or robotised production plants, among others.”
Edzcom, formerly Ukkoverkot, has at least 26 operational private LTE networks in the Nordic region, including with port equipment suppliers Konecranes, Sandvik, Finavia, and Steveco, the Finnish ports of Oulu, Kokkola, and HaminaKotka, Finnish state rail company VR Group, and the Finnish Defense Forces. It claims more private networking contracts in the Nordic region than any other company.
It has recently announced a private LTE deal with Danish engineering firm Danfoss at its factory in Vaasa, in the northwest of Finland. The arrangement also involves Finnish systems integrator Etteplan, and, like many of the above-mentioned deals, country-mate Nokia. Edzcom is engaged with Nokia on its work with the mining division of Sandvik in Finland, also, announced earlier this week.
Edzcom owns spectrum at 2.6 GHz and 450 MHz in Finland, and has been a key partner for Nokia in its pursuit of industrial networking contracts.
Cellnex’s deal for Arqiva’s telecoms unit in the UK is described by the Spanish firm as “decisive” for the consolidation of its “European project.” The project announced in October 2019 involves integrating 7,400 sites and the marketing rights of 900 sites spread across the UK, involving an investment of £2 billion.
The company, which reported first-half revenues of €723 million and EBITDA of €527 million, has been in fierce acquisition mode. Revenues and profits were up 48 percent and 64 percent, respectively. In the first half of 2020, it has made investments to the tune of €2.5 billion, also picking up companies in Portugal, with deals for tower companies OMTEL and NOS Towering, and making a splash in France with the roll-out of a fibre network (fibre to the antenna) to drive the 5G ecosystem.
The Barcelona-based company has increased its forecast for EBITDA to between €1.16-€1.18 billion, versus the previous range of €1.065-€1.085 million. In 2019, Cellnex acquired 5,700 tower sites in France from Free, the French MNO controlled by Iliad. It also acquired 2,200 sites from Iliad in Italy, and 2,800 sites from Swiss operator Salt. It has similar investments with BT in the UK, Cignal in Ireland, and Orange in Spain.
Cellnex has a portfolio of 61,000 sites in total, Spain, Italy, the Netherlands, France, Switzerland, the UK, Ireland and Portugal. Its business is structured in four major areas: telecoms infrastructure; audiovisual broadcasting networks; security and emergency service networks; and smart city and urban IoT solutions. The deal for private networing firm Edzecom falls into the last bucket.
The LTE and 5G market for enterprise infrastructure is about to boom. Spending on private and shared enterprise networks will surpass spending on public cellular networks in about 15 years, reckons ABI Research. The traditional operator community has a fight on its hands to guarantee a place at the table, as the new Industry 4.0 networking feast unfolds over the next decade.
Dimitris Mavrakis, research director at ABI, commented: “By 2036, what is spent on enterprise cellular will be more than [what goes] public cellular. Enterprise use cases will be more important than consumer use cases.”