British outsourcer Mitie is on the hunt for more acquisitions as it aims to grow its rapidly expanding telecoms support business to boost profit margins and capitalise on the roll out of the UK’s 5G network.
It follows the creation of its telecoms division, which is growing its “end to end” business that involves acquiring land, constructing and designing masts, and maintaining equipment as the UK moves to 5G.
The UK has targeted 2030 for the majority of the population to have access to 5G, the fifth generation technology for broadband networks that has the potential to be much faster with fewer delays than 4G.
Simon Venn, managing director of Mitie’s technical services, said: “We’re already one of the biggest providers of that end to end capability in the UK, but we are still actively looking to scale that part of our business through other acquisitions.”
Mitie, one of the UK’s top listed outsourcers with a £1bn market cap and a 68,000 workforce, also aims to benefit from the removal of China’s Huawei from the UK telecoms network by 2027 following security concerns.
Mitie Telecoms was created in 2021 after the group acquired DAEL Ventures. Since then it has been growing the business through purchases of 8Point8 and P2ML.
Although Mitie is not disclosing the size of its telecoms business, it insists the scale of its operations and its “end to end” capabilities make it an attractive partner for the telecoms industry.
As well as acquisitions, the outsourcer wants to grow this division organically.
Venn also stressed that the removal of Huawei’s infrastructure is an “enormous amount of work”, which has added to a “massive amount of investment going into 4G and 5G”.
“If you consider just the sheer volume of telecoms masts in the UK, it runs into, for each operator, thousands of masts and the removal of that Huawei equipment and hardware [is] a massive task in itself, so it’s an opportunity.”
John Strand, founder of telecoms consultancy Strand Consult, said the rollout of 5G could be a growth driver for Mitie in the medium term. Overall, growth has slowed following the end of Covid-19 related contracts.
He added: “Mitie has a window of three to four years where there will be large construction activities and where they can secure a number of attractive contracts with the operators.”
Mitie has also completed capacity upgrades for more than 4,000 sites used to connect calls to emergency services and erected temporary masts to facilitate communications at public events including Glastonbury.
As well as telecoms, Mitie offers a range of services to central government and businesses in engineering, security, landscaping, waste management, cleaning, energy management and decarbonisation.
Other companies in the UK telecoms support services space include Renew holdings, construction group Galliford Try, M Group Services and Cellnex UK.
