Spark New Zealand, a wireless carrier and fixed broadband provider in New Zealand, today announced its plans to establish Spark TowerCo, as a subsidiary company, into which Spark will transfer its passive mobile tower assets comprising ~1.5k mobile sites. Through this transaction, Spark expects to drive improved utilization and capital efficiency of its passive mobile assets and create an opportunity for third-party capital to be invested.

In terms of timing, Spark intends to establish Spark TowerCo and commence a process in H2 FY22 (i.e., during the six-months ended June 30, 2022) to explore the investment of third-party capital into Spark TowerCo.

UPDATE: Ontario Teachers Takes 70% Stake in Spark New Zealand’s Towers

Spark TowerCo – New Zealand Mobile Towers

Spark TowerCo will comprise ~1.5k mobile sites in New Zealand with a low tenancy ratio of only 1.07x. Indeed, this implies 1.6k tenants (mainly Spark) with equipment on the company’s towers.

Physically, Spark TowerCo’s mobile sites will be ~70% macro towers, ~15% on buildings, and ~15% on light poles. While geographically, these mobile sites will be located throughout New Zealand, serving the following population types: 53% urban, 15% regional, and 32% rural.

Notably, ~250 sites of Spark TowerCo relate to outbound colocation on third-party owned infrastructure, such as Rural Broadband Initiative (RBI) 1 sites. As such, Spark TowerCo owns the passive infrastructure associated with only ~1.25k of its sites.


Spark TowerCo will manage its portfolio of ~1.5k mobile sites in New Zealand. Additionally, the company will provide passive equipment facilities such as power, including batteries, and will hold some land rights and selected freehold property sites.

Beyond its existing sites, Spark TowerCo will deliver a “significant” build-to-suit (BTS) program for Spark to support its network expansion and densification requirements. Principally, tower growth drivers are the demand for data and Spark’s expanding wireless broadband base.

Third-Party Capital

If Spark’s process results in third-party capital investment into Spark TowerCo, then Spark expects to retain a shareholding and remain a key anchor tenant of Spark TowerCo. As such, agreements will be put in-place, on arms-length terms, for operations and services from the tower company. Finally, Spark anticipates the process to take a number of months until conclusion.

Transaction Rationale – Spark

Spark New Zealand views neutral host infrastructure and shared ownership as an effective way of improving returns from passive infrastructure, including its physical towers, which are “not a source of differentiation in the market” and “not critical to competitive advantage”. Instead, in mobile, Spark views its active equipment as the key driver of its competitiveness. Specifically, these active assets include the company’s core network and radio equipment, which leverage Spark’s spectrum holdings.

By separating Spark’s passive tower infrastructure, which supports the company’s active equipment, the company seeks to improve:

  • Utilization: through coverage expansion. For example, Spark intends to accelerate its 5G roll-out, delivering 90% population coverage across New Zealand by the end of 2023
  • Tenancy: by allowing colocation of third-party wireless carriers and network service providers on the towers
  • Efficiency: in build, maintenance, technology, and lease costs as Spark expands mobile coverage across New Zealand
Adam Simmons covers Towers for Dgtl Infra, including American Tower (NYSE: AMT), Crown Castle (NYSE: CCI), SBA Communications (NASDAQ: SBAC), Cellnex Telecom (BME: CLNX), Vantage Towers (ETR: VTWR), IHS Holding (NYSE: IHS), and many more. Within Towers, Adam focuses on the sub-sectors of ground-based cell towers, rooftop sites, broadcast / radio towers, and 5G. Adam has over 7 years of experience in research and writing for Towers.


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