Telefonica to Split of Submarine Cables from Telxius

According to telecompaper news, Telefonica is planning to split its submarine cables business from the rest of its infrastructure subsidiary Telxius, according to unnamed sources cited by Bloomberg and subsequently reported by El Economista. Telxius operates an 87,000 km international network of high capacity fiber optic subsea cables, including the latest MAREA and BRUSA cables.

The company is in the process of discussing the move with advisers and investors, including 40 percent shareholder KKR and Pontegadea, the holding company of Zara founder Amancio Ortega, which owns a 10 percent stake. Separating its submarine cable assets from the rest of the Telxius infrastructure would allow Telxius to focus solely on mobile phone towers, said the report.

The cable business currently contributes around 60 percent of Telxius’ revenues and a spin-off could enable Telefonica and KKR to sell their large undersea infrastructure to potential stakeholders, added the report. In September the Spanish operator said it was planning to monetise its infrastructure assets and in November it announced the creation of a new unit called Telefonica Infra to hold the group’s shareholdings in communications towers and other telecommunications infrastructure vehicles, with its 50.01 percent stake in Telxius as the unit's main asset.

Telxius is the global infrastructure company of the Telefónica Group, with one of the largest portfolios of telecommunication sites in the world.

Telxius’ more than 20,000 sites are located in Europe and Latin America: 70% in Spain and Germany plus 30% in Brazil, Peru, Chile and Argentina.

Additionally, Telxius operates an 87,000 km international network of high capacity fiber optic subsea cables, including the two highest capacity systems in the world, MAREA and BRUSA.