2degrees announces sale of telco tower assets to Connexa

2degrees has announced the pending sale of its passive mobile telecommunications tower assets to Connexa for NZD $1.076  billion.

Under the terms of the transaction, 2degrees has entered into a 20-year agreement with Connexa (plus rights of renewal) to secure access to existing and new towers, with an additional tower build and co-location commitment of 450 sites over the next ten years.

2degrees will still continue to own the active elements of its network. This includes the radio access equipment, spectrum assets, and transmission and backhaul.

2degrees CEO Mark Callander says the move will enable further investment in 5G build and increase focus on its core business.

"We are incredibly proud of the network we have built and the coverage we deliver. For a challenger brand to be winning network awards like we have been over the last couple of years is almost unheard of," he says.

"Today's sale of 1,124 towers will allow us to focus more on, and continue to invest in, innovative solutions and services for Kiwis while realising the value of our passive mobile assets. In addition, we have committed to another 450 locations with Connexa to provide even greater coverage and network density for 5G."

Callander says that while the 2degrees network is very strong, towers and real estate are not a significant focus for the company. He says that investing in the active network layer will help drive the company forward.

"The network we have built is phenomenal, but towers and real estate is not where we innovate," says Callander.

"What we do with the active network layer is key and will continue to be the focus of future investment, this is where we will differentiate and grow. You'll continue to see laser focus on growth and value- add services from 2degrees, along with acceleration of digital-first customer experience, and new product development."

Completion of the deal is subject to approvals from the Overseas Investment Office (OIO) and Commerce Commission, and confirmation is expected to occur in mid-2023.

In 2022, 2degrees and Vocus came together under the 2degrees brand to form New Zealand's third largest full-service telecommunications provider. 

The company markets itself as a challenger brand and offers broadband and mobile services covering 98.5% of places Kiwis live and work. It provides a nationwide fibre network and modern technology platforms, as well as energy services, all supported by a customer care team and a network of 58 retail stores. 

As a result of various mergers and acquisitions, it now operates the 2degrees, Slingshot and Orcon brands.