Vodafone today announced plans to separate its mobile mast operations in Europe into a new company that it potentially could list, in a move it said would unlock value for shareholders.
Shares in the world's second largest mobile operator jumped 8% in early trade to 143 pence, regaining ground lost when the company cut its dividend for the first time ever in May.
Chief executive Nick Read said the tower company will be created in the next 18 months.
It would be Europe's largest, comprising about 61,700 sites, with 75% in its biggest markets of Germany, Italy, Spain and Britain.
Mobile operators across Europe have been selling or sharing their network infrastructure to cut debt, tapping into the appeal of the assets' steady cash flows to investors.
A standalone towers business would enable investors to avoid the risks and costs associated with the broader mobile phone operations.
"Given the scale and quality of our infrastructure, we believe there is a substantial opportunity to unlock value for shareholders while capturing the significant industrial benefits of network sharing for the digital society," Read said in a statement.
He said the proceeds from listing a minority stake in the tower company, or from attracting other investors, would be used to cut Vodafone's debt.
Vodafone already shares network infrastructure with Telefonica's O2 in Britain and with Orange in Spain and is close to finalising an agreement in Italy with Telecom Italia's tower unit Inwit.
Cellnex, Europe's biggest towers group, reported a 10% rise in first-half core earnings today, and said it was seeking more deals.
Vodafone announced plans to split its towers business as it reported that first-quarter group service revenue decline by a smaller-than-expected 0.2%. It said a gradual recovery in its previously weak top line would continue.
"We are now at a turning point in our service revenue following the low point in Q4 of last fiscal year," Read told reporters.
"We are confident that this improvement in service revenue will continue as the year progresses," he added.
Vodafone said today that market conditions in Italy had continued to improve and retail growth in Germany remained robust, which in part had been offsetting intense competition in Spain.
The company said it was confident about its full-year guidance for adjusted core earnings of €13.8 billion-14.2 billion and free cash flow before spectrum costs of at least €5.4 billion.