Selling of all your mobile towers and rooftop infrastructure is a bold move.
๐ Background: TPG Telecom is Australia's second-largest telco company listed on the ASX. It's a combo of Vodaphone and TPG, created when the two merged together back in 2020.
๐ What happened: TPG Telecom owns a whole heap of mobile towers and infrastructure to run its networks. But not anymore! It just sold its entire mobile tower and rooftop infrastructure network for around $950 million.
๐ What else: It's the third major player to sell off passive infrastructure assets after Telstra and Singtel (aka Optus), with a view to become asset-light.
๐ก An asset-light business model is where a company owns fewer capital assets, compared to the value of its operations.
๐ก To be asset-light, companies generally need to either start off with few assets, or transfer or sell their assets to other owners. That's things like processes, people, tech and infrastructure. It helps them cut the dead weight to either run faster or focus on core capabilities.
๐ก Big telcos in the US turned asset-light years ago to prioritise software and service investments. European telcos followed suit shortly after... and it looks like Oz is finally starting to catch up.
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