Why the Levi Strauss jeans lesson could make Vodafone’s Vantage Towers a decent bet on surging 5G mobile data demand

It’s been a path to investment success since Levi Strauss started making tough denim workwear for miners in the California gold rush. If you’ve missed the stampede, provide a useful product to the people who haven’t.  

So, if you want a play on e-commerce, buy Segro for warehouse space, if you want to profit from cryptos, buy Nvidia, whose chips power them.

If you want to get into 5G and mobile data growth...? You could buy the phone companies, but while there’s value in their bombed out share prices, they’re plagued with huge rollout costs.

So, what’s the 5G equivalent of a pair of Levi’s miners’ dungarees? Potentially, mobile phone towers.

Mostly built by phone companies over the decades, towers and masts on top of buildings are becoming an investment category in themselves. In the US, they’re way ahead, with numerous companies on the stock market.

In Europe, less so. Which is why  Vodafone’s IPO of Vantage Towers, its 68,000 masts in Europe, is eagerly awaited.  

Valuations are around €20 billion (with Voda pocketing maybe €5 billion). Today it set out what investors can expect when it floats soon.

There’s a tonne of detail, but key  was the plan for 7100 new sites funded by Voda, plus enormous pent-up demand.  

It currently has 13,400 requests from phone companies seeking to put their kit on its towers.  

It also throws off €373 million a year in cash, of which 60% will be returned in dividends.

If the bankers don’t price it too greedily, Vantage seems a smart way to make it like Levi.