Telus Tailors Cell Tower Sale to Woo U.S. Buyers, Avoid Ottawa: Analysts

Telus is looking to sell a major stake in its cellphone tower network — and it’s doing so in a way designed to draw in U.S. buyers while avoiding federal government pushback, according to analysts.

The telecom is looking to offload 49.9% of its 3,000 wireless towers, a deal that could bring in between $1 billion and $1.5 billion. But unlike a full sale, Telus would retain control of the network and continue operating the towers, paying a fee to the buyer for use. This setup is meant to limit national security concerns as Ottawa tightens oversight of foreign investment.

Doug French, Telus’s chief financial officer, said the company has received interest from around the world. “We would consider any partner at this stage. We will not be eliminating on geographical region,” he said in an interview with the Globe and Mail.

U.S. firms like American Tower and Crown Castle — both of which run tens of thousands of towers — are seen as logical buyers. These companies have the money and scale to make a serious bid. Financial investors, including Canadian pension funds and infrastructure firms like Brookfield Infrastructure Partners (a subsidiary of Brookfield Asset Management, which Prime Minister Mark Carney used to be an executive for), are also expected to take a look.

The timing comes as the federal government warns against “opportunistic” foreign takeovers, especially with Canadian asset values lower and tensions still high with the U.S. over trade. Earlier this month, Ottawa updated its rules to give itself more power to block deals that could pose risks to Canada’s economic security.

But Telus looks to have designed this transaction specifically to avoid triggering that scrutiny. The company would maintain control of the towers, which are considered passive infrastructure and not tied to sensitive user data. That makes it less likely the deal would raise concerns under the Investment Canada Act or with federal industry regulators. From what we’ve seen, federal regulators look to approve most deals related to telecom (just look at the Rogers-Shaw merger).

Analysts say that structure is smart — and likely to work. In 2020, American Tower got approval to buy 200 Canadian towers as part of a larger U.S. deal, suggesting Ottawa may be open to similar arrangements.

Telus is pitching the sale as a growth opportunity. With smaller players like Cogeco and Quebecor expanding their wireless networks, demand for tower access is expected to rise, bringing in more revenue for whoever buys in.

Meanwhile, rivals like Rogers, Bell, and Quebecor — who own thousands of towers themselves — are watching closely. If Telus’s plan succeeds, they may follow suit. Because who doesn’t want cash to pay down debt?