Why MNO consolidation is sometimes good news for towercos
The knee-jerk reaction can be that MNO consolidation lowers the glass ceiling on tenancy ratios and is therefore bad news for towercos – but is that always the case?
It’s no secret that many MNOs are struggling under an increasing burden of debt. The crippling cost of spectrum, hefty tax burdens, declining ARPU, OTT players eroding revenue streams… monetising non-core assets like towers may be one outcome, but another outcome is consolidation. But while it may seem obvious that MNO consolidation lowers the glass ceiling on prospective tenancy ratios, in most markets a reduction in the number of MNOs may be good news in the medium term. Why?
Why shouldn’t the Brazilian tower industry be panicking about the bankruptcy of Oi?
Why are towercos seeking to acquire assets at the same time that MNO consolidation is taking place in Pakistan and Bangladesh?
Why is the European mobile market opening up to the towerco business model whilst simultaneously consolidating to offer less potential clients for those towercos?
It may be counter-intuitive, but MNO consolidation can be good news for towercos.