Moody’s perspective on the latest XL tower sale to Protelindo
XL Axiata’s US$270mn tower sale to Protelindo will strengthen Protelindo’s competitive position and improve XL Axiata’s leverage
The sale of 2,500 telecommunications towers owned by mobile operator, XL Axiata Tbk (Ba1 stable), when consummated, will strengthen Profesional Telekomunikasi Indonesia’s (Protelindo, Ba1 stable) position as the largest independent tower company in Indonesia by towers and tenants.
Post-acquisition, Protelindo will operate about 14,700 towers—representing a 19% share of the Indonesian tower market—with about 24,700 tenants. By comparison, the second largest independent tower company, Tower Bersama Infrastructure (Ba3, stable), had about 11,389 towers at 31 December 2015 that were leased to 18,796 tenants.
Exhibit 1: Protelindo’s market share will increase to 19% from 16% post-XL Tower acquisition
Acquisitions help tower companies achieve scale and give them a competitive edge by expanding their geographic footprint.