What happened

Shares of Vodafone Group (NASDAQ:VOD) gained 11% in July 2019, according to data from S&P Global Market Intelligence. The London-based telecom posted solid first-quarter results near the end of the month, paired with a couple of network-sharing partnerships and a fresh restructuring plan. Vodafone shares jumped 9.9% the next day alone.

So what

First-quarter sales came in at 10.7 billion euros, 200 million euros below the year-ago quarter due to currency exchange headwinds. The company enjoyed significant organic growth in key markets like Turkey, Egypt, and Germany while stricter regulations led to lower sales in other major markets such as Spain and South Africa.

Vodafone closed a network sharing agreement with Spanish peer Telefonica (NYSE:TEF), expanding their existing collaboration to cover 5G system across the U.K. The company also reached a deal to share 5G equipment with Telecom Italia, creating a jointly owned tower company with 22,000 towers in the process.

Moreover, Vodafone has started to separate its tower operations -- including the proposed Telecom Italia joint venture -- into a new company. This "TowerCo" will start stand-alone operation next spring and may eventually trade under its own stock symbol.

A densely populated cell tower in silhouette against a colorful sunset.

Image source: Getty Images.

Now what

The first-quarter report was fine but not terribly impressive. The real catalyst behind July's big share price jump was the spinoff of Vodafone's tower assets and operations. If executed correctly, this could help Vodafone clean up a messy balance sheet while investors might get access to a robust dividend-paying tower company in the end.

Vodafone has been going through a tough period in recent years with flat cash flows and waning revenue. The 5G era might signal a turnaround here, but I wouldn't exactly bet the farm on that idea.