Telefonica sells data centres in exchange for stake in hosting provider

Telefonica has agreed to swap four of its remaining data centres for a 20% stake in Nabiax.

Telefonica has announced the sale of four data centres to Asterion Partners, in exchange for 20% ownership of Nabiax, Asterion’s colocation and hosting arm. The data centres, two located in Spain and two in Chile, will continue to be operated by Telefonica, allowing them to retain their customers and value proposition while providing the company with a ‘seat at the table’ with Nabiax.

The deal was first rumoured in February, when El Economista wrote that Telefonica would sell off four data centres to Nabiax for €100 million.

At that time, it appeared that the primary benefits the ability to focus on core offerings, as well as cash-in-hand to offset the mounting debts associated with infrastructure upgrades and modernization to the requirements of 4G and 5G networks. Telefonica has been offloading infrastructure over the past several years, including the January 2021 sale of its Telxius tower division to American Towers, which garnered Telefonica €7.7 billion.

However, as the deal was for part ownership in Nabiax rather than money, it appears that Telefonica is also interested in building on future relationships with the colocation and hosting provider. In a statement regarding the sale the companies said, “Nabiax and Telefónica will continue developing their existing commercial cooperation and will explore new joint business opportunities, such as new services, edge computing and data centre automation.”

The two companies already have a history to build a cooperative relationship. In 2019, Telefonica sold 11 data centres to Asterion Partners for €550 million ($616 million), as a part of Telefonica’s 2019 debt-reduction strategy.

That deal, for data centres totalling 29MW across Spain and Latin America, actually led to the creation of Nabiax by Asterion Partners. Nabiax now runs the colocation and hosting services arm of Asterion for those markets.

The new deal, similar to the previous agreement between Telefonica and Asterion in 2019, includes a housing services element with initial ten-year terms.

Telefonica noted: “The agreement announced today allows Telefónica to crystallize the value of its infrastructure assets, while preserving intact Telefónica’s commercial positioning, client relationships and leadership in cloud, hosting and housing services provided to corporate customers. Additionally, through the 20% stake that Telefónica Infra will hold in Nabiax, Telefónica retains exposure to a global data center platform with attractive growth prospects participating in the company’s value upside.”