Communications Infrastructure

We believe the communications sector is one of the more compelling valuations dislocations we’re seeing in infrastructure today. These essential assets, with long‑term contracted cash flows, are trading at valuations we haven’t seen in years. Cell towers or TowerCos own the physical tower infrastructure that mobile operators rely on. Revenues are underpinned by long term contracts, in some markets up to twenty years, which gives very visible, recurring cash flows and adding new tenants to an existing tower has a very low incremental cost. Combined with ongoing growth in data usage, this has historically been a strong business model which continues to attract substantial private capital.

However, listed tower valuations have weakened significantly. Rate volatility and more recent concerns about mobile operator consolidation have weighed heavily on sentiment. As you can see on the chart, tower companies have lagged global equities and global infrastructure by a wide margin. For us, this valuation reset is actually a key part of the opportunity. The sector now represents around 15% of our portfolio. The relative value stands out clearly when you line up valuation metrics and cash yields with the multiples being paid by private buyers.

Europe is where the dislocation is most pronounced. It’s apparent that consolidation risk is a key investor concern because of fears around tower decommissioning. But if regulators ultimately allow consolidation, we suggest it will also support the sector where operator combinations have historically included mandated infrastructure spending. Stronger operators then also tend to invest more, which leads to better networks and more activity for tower companies which we’ve seen before. So it cuts both ways. Let me touch briefly on the individual European names. Starting with Cellnex, which looks highly contrarian, the shares are trading at their lowest valuation levels since IPO, around 13x EV/EBITDAaL. This looks particularly dislocated when you compare it to the private market. Cellnex has sold assets itself such as its Nordics and Irish assets at 23x and 24x respectively. And over the next 5 years, cash returns to shareholders could exceed 50% of the current market cap. INWIT shows the same kind of valuation gap. The stock is trading well below private market benchmarks, including around 26x EV/EBITDAaL where a minority stake changed hands a few years ago, and around 18x where its largest private shareholder increased its position as recently as 2024. Today the listed shares are closer to 14x. Looking ahead, there are three things that should support these European investments. First, an acceleration in spending post-mobile operator merger integration in Spain and the UK reaches completion. Second, greater clarity around contract renewals in markets facing consolidation uncertainty. And third, we expect greater visibility around Cellnex’s next phase of growth. The latter will be more apparent over the course of 2026.

Before closing, a quick update on satellites. There is a lot of interest around low earth orbit satellites constellations like Starlink, but satellites are not a replacement for towers. They are complementary, helping deliver connectivity in rural areas where towers are not economical. They do not provide the density, capacity, or economics needed in dense urban environments where the majority of the global population lives. Even Starlink’s Elon Musk suggested that satellites are designed to be supplemental. We like tower assets because they are essential, they have long term contracted revenues, and today they are trading at valuations that imply strong long term compounding returns well above our cost of capital.

Disclaimer
This video is prepared and issued by Maple-Brown Abbott Limited ABN 73 001 208 564, AFSL 237296 (‘MBA’) as the Responsible Entity of the MBA Global Listed Infrastructure Fund (ARSN 164 901 982) (‘Fund’). This video contains general information only, and does not take into account your investment objectives, financial situation or specific needs. Before making any investment decision, you should seek independent financial advice. This document does not constitute an offer or solicitation by anyone in any jurisdiction. Past performance is not a reliable indicator of future performance. Neither MBA, nor any of its related parties, directors or employees, make any representation or give any guarantee as to the return of capital, performance, any specific rate of return, or the taxation consequences of, any investment. Any views expressed on individual stocks or other investments, or any forecasts or estimates, are not a recommendation to buy, sell or hold, they are point in time views and may be based on certain assumptions and qualifications not set out in part or in full in this document. Individual stocks referred to, may or may not be currently held by the Fund. Information derived from sources is believed to be accurate, however such information has not been independently verified and may be subject to assumptions and qualifications not described in this document. To the extent permitted by law, neither MBA, nor any of its related parties, directors or employees, make any representation or warranty as to the accuracy, completeness, reasonableness or reliability of this information, or accept liability or responsibility for any losses, whether direct, indirect or consequential, relating to, or arising from, the use or reliance on this information. Before making a decision whether to acquire, or to continue to hold an investment in the Fund, investors should obtain and consider the current PDS and Target Market Determination (TMD) or any other relevant disclosure document. For the Fund, the PDS, AIB and TMD are available at maple-brownabbott.com/document-library or by calling +61 2 8059 7671. This information is current as of 12 February 2026 and is subject to change at any time without notice. © 2026 Maple-Brown Abbott Limited.