Cordiant Digital Infrastructure says that its Polish portfolio company, Emitel, has signed a long-term agreement with Orange Polska S.A. a leading mobile network operator in Poland, to expand mobile network coverage in the country.
Under a built-to-suit model, Emitel will construct hundreds of new telecommunications towers for Orange over the next few years. Orange, as the anchor tenant, will commit to pay a recurring fee under a long-term contract for each site built based on industry-standard terms. In addition, Emitel can sell the remaining space on each tower to other operators to increase the profitability of each site. The capital expenditure for this project is expected to be funded by Emitel’s free cash flow.
As of 31 December 2024, Emitel operated 762 communications towers, with all four of Poland’s major mobile network operators as tenant. On average, these towers have a tenancy ratio (tenants per tower) of 1.4x across the roughly 300 towers that have been constructed under the build to suit model. These typically have contract terms of at least 15 years with escalation clauses.
Since Cordiant bought Emitel in 2022, Emitel has expanded its tower portfolio by 27% and increased associated revenue by 37%. In the nine months to 30 September 2024, Emitel recorded 12.1% year-on-year revenue growth for telecommunications site hosting. This new project with Orange, together with other investments, is expected to enable Emitel to expand its nationwide tower portfolio to well over 1,000 sites and continue its high rate of growth in this segment.
The growth in demand for modern digital infrastructure in Poland, the sixth largest EU economy, is being fuelled by rapid economic growth driven by strong household consumption, increased government spending, and a positive contribution from EU funds. In 2024, Poland was a standout performer in Europe recording GDP growth of 2.9%, well above the EU average of 0.9%. Economists expect growth in 2025 to be even higher and the IMF is forecasting that in 2026, income per capita will be higher in Poland than in Japan.
[This looks like more good news for Cordiant Digital Infrastructure. We feel that it was unfairly caught up in the Digital9 debacle and last night’s 31.5% discount does not reflect the quality of the portfolio. If it does not narrow, the company could be a bid target.]
CORD : Cordiant Digital Infrastructure says Emitel has secured new mobile tower contract
