Monthly news round-up: July 2022

 

 

Safaricom Ethiopia announced its commercial launch in August 2022, having missed the original date back in April. Safaricom plans to have its network active across 25 cities by April 2023 although these cities have not yet been named. Despite the disruptive conflict in the country’s Tigray region, Safaricom has a core network, IT, product and services, a call centre and two data centres ready to launch, as well as signing infrastructure sharing and interconnect agreements with Ethio Telecom. 

 

MTN Ghana has cancelled plans to pilot 5G services this year as the authorities are not yet ready to award the required permits. CEO Selorm Adadevoh did not outline a revised timeline for deployment but affirmed MTN’s promise to deploy 5G soon under its Ambition 2025 strategy. MTN has already upgraded over 1,322 sites in preparation for 5G rollout. 

 

The Guinean government has stated that the relaunch of operator Guinea Telecom is a major priority to reduce the cost of connectivity and drive digital transformation in the country. Formally Sotelgui, Guinea Telecom has revealed it has 183 sites, 151 of which are LE capable. Having declared bankruptcy in 2013 and dissolved in 2017 after being plagued by mismanagement, the operator is now launching with zero debt. Guinea is one of the few African markets without a state-owned operator to lead digital connectivity initiatives, and government hopes that Guinea Telecom will offer strong competition against market dominators MTN and Orange. 

 

Telkom Kenya has completed the Coast and Lower Eastern phase of its nationwide mobile LTE expansion program, deploying 224 mobile sites. In total, Telkom will roll out 2,000 additional 4G sites by 2023 through a US$100mn investment strategy to address digital transformation and to elevate Telkom as the technology partner of choice in Kenya and the region. 

 

Vodacom has separated its South African tower portfolio into a standalone towerco which is set to launch imminently, as part of the group’s ‘System of Advantage’ strategy to optimise its assets. The new entity will be 100% owned by Vodacom Goup and will no doubt have a strong start as Vodacom recently reported strong performance in their South African business announcing a 5.2% rise in first-quarter revenue. Vodacom’s new towerco will own over 9,500 sites, making it the largest towerco in South Africa and taking the top spot from another new player to the market IHS Towers who recently completed their acquisition of MTN’s 5,709 tower portfolio. South Africa remains a highly active market with a nation-wide 5G rollout driving BTS and densification programs, but not without its challenges as an increasingly unstable national energy grid and high rates of site vandalism cause constant energy headaches. 

 

Vodacom South Africa have announced plans to invest in better coverage, spending over US$29.4mn on mobile networks across the Western Cape province this year to grow coverage reach and improve network uptime, particularly in rural areas which have poor or no connectivity. As Vodacom’s data traffic is carried on 5G technology, this network expansion will also go towards 4G capacity across 530 sites in the region. Vodacom has spent over US$88mn over the last three years in the Western Cape region upgrading over 75% of its 1,659 base stations with 4G capacity. Vodacom has also installed battery pack-up equipment at 240 sites in the Western Cape as well as security systems to counteract the high degree of vandalism. 

 

MTN Group has commenced talks to acquire domestic rival Telkom South Africa which would help MTN step up competition with market leader Vodacom. Telkom is 39% state-owned, but MTN has offered to pay for the operator through shares or a stock and cash combination. MTN would benefit in rolling out 5G and boosting 4G after both operators won spectrum in the country’s recent auction. 

 

Zambia’s government has officially denied media reports that it plans to sell Zamtel, suggesting it will be recapitalised in order to eventually effectively compete in the market. However, the government previously stated that it would not give the cash-strapped operator the US$265mn recapitalisation it needs. Zamtel’s working capital deficit is estimated at around US$60mn with outstanding debts of US$175mn. 

 

 

 

Telstra have completed their acquisition of multi-country operator Digicel Pacific. Australia’s largest MNO has stumped up US$270mn of equity, with the Australian government funding the remainder of the US$1.6bn purchase price through Export Finance Australia.  

Digicel Pacific has 2.8 million subscribers across Fiji, Nauru, Papua New Guinea, Samoa, Tonga and Vanuatu. Telstra has been working closely with the governments of these Pacific nations to secure approval for the takeover, and announced that it intends to run Digicel Pacific as a separate business under its umbrella. Telstra also owns a majority stake in Australia’s largest towerco, Amplitel – carving out tower assets and securing external capital to launch the new business last year. No towerco activity is reported in any of the countries that Digicel Pacific operates. 

 

Four firms have been approved to participate in India’s 5G spectrum auction, scheduled to start on July 26. Joining major Indian MNO’ Reliance Jio, Bharti Airtel and Vodafone Idea are national conglomerate Adani, under their data network brand.  

Exploring the funds committed for the auction, it appears that Adani are more interested in using the spectrum for private network purposes. Jio are set to be the biggest spenders, with between US$US6-12billion expected to be deployed for near nationwide coverage. Bharti Airtel are a close second, while cash-strapped Vodafone Idea have still put in a respectable showing, although their acquisition is likely to be more focused on strategic commercial deployment for now. 

 

The Department of Telecommunication (DoT) has updated its guidelines around network equipment procurement in time for the next generation of networks to start being built in India. The regulator maintains a list of “trusted vendors” which the MNOs may use freely. Under the old rules, explicit permission had to be sought before networks were upgraded with technology from vendors not on this list, but following the changes it is clearer that the case is now the same for the expansion of new and existing networks. The update follows a series of amendments in March 2021 which were primarily motivated to restrict Chinese firms Huawei and ZTE having a significant presence in telecoms networks across the country amid tension between New Delhi and Beijing. 

 

Telkomsel carve out Mitratel completed its IPO in September 2021 and this month revealed it was increasing its plans to roll out a fibre optic network across Indonesia, funded by the proceeds. Previously Mitratel had outlined an annual target of 6,000km, but due to significant demand CIO Hendra Purnama stated that the 28,000+ tower company will seek to revise the target to be more aggressive. Mitratel secured a fibre optic contract of 2,117 kilometers in the first quarter of the year, which has rendered its 6,000km target too small.  

Mitratel’s biggest competitor, independent towerco Protelindo, has been investing in its fibre network for over 7 years, and manages 76,000km as of Q421. 

 

Japan’s newest mobile operator, Rakuten, has been hard at work deploying its network over the past couple of years. Following its investment in JTower last year to speed this process up, it has now partnered with Tokyo Electric Power Company (TEPCO) to deploy base stations at their power grid sites. Rakuten are keen to leverage the speed and cost advantages of deploying base stations at sites by using assets directly from a power grid operator.  The two companies have formed a Joint Venture - Rakuten Mobile Infra Solution, which will begin operations immediately.  

 

Malaysian head quartered edotco Group has released its inaugural sustainability report. The report details efforts made by the Malaysian headquartered towerco in 2021 and breaks down its commitments and achievements towards the planet, equality in its workforce and local communities it serves. The report ties into edotco’s ambitions to become a top 5 towerco globally.  

 

Reuters has reported that two sources have confirmed Qatar based Ooredoo are looking at selling their Myanmar business. While a buyer is yet to be found, Reuters sources said that local firms Young Investment Group and Shwe Than Lwin were joined by Singapore based Campana Group. Telenor recently completed the sale of their business to M1 group, but regulator PTD insisted M1 partner with local firm Shwe Bain Phyu Group on the transaction. 

 

“TowerCo”, the tower carve-out of Spark New Zealand, has been sold to Ontario Teachers’ Pension Plan (OTPP) for US$900mn. OTPP will acquire a controlling 70% interest in the business. Spark carved out 1,263 sites into TowerCo and has retained around 250. In line with other transactions across the Tasman Sea in Australia, the transaction valued Spark Towerco at US$1.1 billion, for an FY23 Pro Forma EBITDA multiple of 33.8x. 

Spark has entered into a fifteen-year agreement with TowerCo as anchor tenant and the new independent towerco will have a build commitment of 670 new sites to be completed over the next ten years. While OTPP has significant experience investing in infrastructure assets, Spark’s portfolio marks the first major investment in telecom towers. Read TowerXchange’s analysis 

 

Global asset management firms InfraRed Capital Partners and Northleaf Capital Partners have each acquired 40% of Vodafone New Zealand’s 1,484 towers. Vodafone New Zealand is owned by Brookfield and Infratil rather than its UK based namesake, with Infratil planning to reinvest proceeds from the sale to acquire the final 20% of the business. Vodafone New Zealand will enter into a 20-year agreement with the new towerco to maintain access to the towers, and the deal also includes an additional 390 sites to be rolled out over the same 10-year period as Spark.  

In a strikingly similar deal, the transaction is expected to complete in Q422 and has raised US$1.1 billion for Vodafone New Zealand, for an FY23 pro-forma EBITDA multiple of an identical 33.8x. Completion of the transaction is subject to Overseas Investment Office approval. Read TowerXchange’s analysis 

 

Pinnacle Towers, through its local subsidiary Frontier Tower Associates, has become the first common tower company in the Philippines to reach a landmark 500th build-to-suit tower. Pinnacle sit in third place in terms of owned towers in the Philippines, due to edotco and EdgePoint successfully winning a bid for operator Smart’s towers back in April.  

Speaking at TowerXchange Meetup Asia in 2021, CEO Patrick Tangney disclosed that Pinnacle had primarily focused on building towers in more remote and rural locations across the archipelago. The company is backed by Private Equity giant KKR.  

 

Bersama Digital, the majority shareholder in Indonesian towerco Tower Bersama, has partnered with local investment firm Opti-Teknology to acquire a majority stake in Alliance Tower Corporation for an undisclosed fee. Under the new ownership Opti-Teknology will own 49% of the business. Alliance Towers was founded by Opti-Teknology’s equity owners, and manages 40 towers in the Philippines.  

They had plans to roll out 500 sites this year, but prior to the fresh investment had scaled back these plans. The transaction marks Bersama Digital’s first tower investment outside Indonesia, where it has employed an aggressive rollup policy of smaller towercos.  Read TowerXchange’s coverage of the news.  

 

NOW Telecom, a telco that serves upper class Metro Manila residents and businesses, has signed an memorandum of understanding with SBA Communications’ Philippines towerco – SBA Towers Philippines. NOW is building out its 5G network and in a stock market filing on July 22nd announced that plans were in place with SBA. The wording implies that SBA will be used not just for macro towers but also wider digital infrastructure required for NOW’s rollout plans 

 

Two of the four committees established to review the proposed DTAC/True merger in Thailand have voted against the consolidation. According to sources speaking with the Bangkok Post, the law subcommittee voted 10-1 against the deal, with the consumer protection panel reaching a similar conclusion in a 6-2 vote where two committee members abstained. If the merger were approved a two player MNO landscape would have emerged in the country.  

 

 

 

 

 

State-owned operator Tunisie Telecom is planning to shut down its 3G network to focus on its 4G system in response to the increase in traffic from customers migrating from 3G – 4G. According to the National Telecommunications Authority, 84% of smartphones in Q1 2021 were 4G compatible compared to 13% for 3G. 

 

The Algerian National Investment Fund (FNI) has completed a 45.57% stake buyout in operator Djezzy from VEON, raising FNI’s share from 51% to 96.57%. FNI announced its aims of preserving the governance of the company and supporting Djezzy’s development plan. 

 

 

 

 

 

After having raised concerns regarding T-Mobile and O2’s 2011 network sharing deal, EU anti-trust regulators have agreed to the concessions proposed by the two operators and PPF infraco CETIN. The operators will look to modernise the network by building multi-standard RAN equipment whilst ensuring that services and investments have cost-based pricing. 

 

Deutsche Telekom has agreed the sale of a 51% stake in GD Towers to Brookfield and DigitalBridge. The deal values GD Towers at €17.5bn, an EV/ pro forma adjusted EBITDA AL 2021A multiple of around 27x. Deutsche Telekom retains a 49% stake in the 40,500 site towerco. Read TowerXchange’s analysis of the deal.   

 

Cellnex has identified over 200 blackspots across Ireland in areas with low population density. The towerco has called upon funding amounting to around €10mn from the government to support rollout of shared infrastructure in what would otherwise be commercially unviable regions.  

 

Italian government agency, Infratel has concluded its second rural broadband tender, aimed at deploying 5G sites in 2,000 underserved areas of the country. INWIT, in conjunction with TIM and Vodafone were awarded the tender worth a total of €345.7mn. The consortium must guarantee transmission speeds of at least 150Mbps to at least 40% of the 2,000 communities, with work needing to be completed by mid 2026. The government will fund 90% of the total rollout costs. The previous rural broadband tender to connect 10,000 mobile sites with fibre had been won by TIM earlier in the year. 

 

Virgin Media O2 has reported that it now has more than 1,300 small cell sites live across London. The new sites, with a typical 80-120m range have been deployed with minimal disruption and in a rapid time frame, with site deployment complete within 6 weeks of site acquisition. Separately, VMO2 and Freshwave have been trialling a small cell solution with a multi-operator antenna, deployed within bus shelters. Similar trials are ongoing at pay phone boxes.  

 

Vantage Towers has presented its second generation EnergyContainer which uses hydrogen and solar PV to power sites, replacing the previous generation which used LPG. Compared to diesel engines which need to be refuelled once a week, the EnergyContainer can manage three months of operations. The container was developed in partnership with Kohler/SDMO, IMT Innovative Metalltechnologien and htw saar. 

 

 

 

 

América Móvil’s Claro Brasil has launched the search for buyers for the surplus base transceiver stations (BTS) it acquired as part of the US$3.425bn joint takeover of Oi Movel. Earlier in July, TIM Brasil and Telefonica Brasil (Vivo) started their own sale processes for 2G/3G/4G/5G-compatible former Oi base stations. TIM is offering a 75% discount to anyone who commits to buy more than 500 base stations across three different nationals codes. In total, TIM has placed 3,610 base stations up for sale, with Bradesco BBI managing the sale. All three acquisitive parties (TIM, Vivo and Claro) are obliged to sell off certain base stations as part of an anticompetition measure imposed on the Oi Movel transaction. 

 

Brazil’s three national mobile operators, Claro, TIM and Vivo, have all switched on Standalone (SA) 5G technology in Brasilia, after receiving the green light from the government. Alberto Griselli, CEO of TIM Brasil said: ‘In Brasilia, we intend to cover 65% of the population in 60 days with 164 towers. At launch, we will have 100 already activated, covering 50% of the population.’ Vivo has indicated that more than 2.5 million of its subscriptions are already in possession of a compatible handset. Claro has around 2 million 5G-compatible subscriptions. Belo Horizonte is expected to be the next city to receive 5G access, followed by Porto Alegre and then Sao Paulo. 

Previously, Claro Brasil introduced Non-Standalone (NSA) 5G services in July 2020 using dynamic spectrum sharing (DSS) technology, which enables the parallel operation of 4G and 5G services via one frequency band. Connectivity was initially enabled in selected zones of Sao Paulo and Rio de Janeiro, and Claro’s NSA 5G footprint stood at 35 cities as of 30 June 2022. 

 

Phoenix Tower International (PTI) has announced the deal, worth US$930mn, which will see mobile operator WOM transfer ownership of around 2,334 sites at the time of closing, with an additional 1,466 sites to be transferred by 2024. The acquisition marks PTI’s entry to the Chilean market and at the same time makes the company the largest independent tower owner in the country. Phoenix Tower International currently owns over 22,000 towers in 19 countries in North America, South America, and Europe, as well as rooftop sites, real estate, and fibre networks. In 2021 the company has made a series of acquisitions to increase its market share in North America. Chile’s fourth largest mobile operator, WOM has been pursuing an aggressive growth strategy to strengthen its position from the current 25% market share. The deal will provide funds for expansion in urban and rural areas, as well as its 5G rollout plans. WOM is the last major mobile operator in the country to monetise its tower assets. 

 

Telcel’s 5G network is now live in 40 Mexican cities, offering coverage to around 56 million people as of end-June. América Móvil noted: ‘The deployment of 5G networks enables us to expand capacity more efficiently and enhances customer experience with greater speed and quality.’ Telcel’s Non-Standalone (NSA) 5G network went live in February 2022 and was billed as ‘the largest 5G network in Latin America’. 5G connectivity was initially enabled in 18 major cities – including Mexico City, Monterrey, Guadalajara, Merida and Tijuana – covering approximately 48 million people from launch. 

 

  

Latin American telecoms giant América Móvil (AM) has reported total revenues of MXN 217.4 billion (USD 10.4 billion) for the three months ended 30 June 2022, representing an increase of 3.3% compared to MXN2 10.4 billion in 2Q21. EBITDA for the quarter under review, meanwhile, climbed 4.0%, from MXN 74.5 billion to MXN 82.7 billion. Finally, AM’s net income slumped 68.0% from MXN 42.8 billion in the second quarter of 2021 to MXN 13.7 billion in 2Q22. The group blames ‘comprehensive financing costs’ of MXN 18.1 billion for its weakened bottom line, with half of the costs said to be net interest payments. In operational terms, AM closed out June 2022 with a consolidated base of 306 million mobile subscriptions, up 10.2% from 207 million one year earlier. This includes the acquired 12.9 million mobile subscriptions in Brazil in 2Q22 as part of a previously agreed deal to carve up Oi’s mobile assets.  

 

Telefonica Moviles Mexico (Movistar) has completed the migration of its 3G and 4G data traffic onto the AT&T’s Mexico network, over two years after signing an infrastructure-sharing agreement with the US-owned operator. 58,000 network elements have been decommissioned following the completion of traffic migration, including antennas, towers and batteries. 13% of the equipment was transferred to other subsidiaries of Telefonica’s HispAm division, while 36% was sold on the market. The remaining was recycled. By utilising AT&T’s network, Movistar is now able to reach 83% of the population with 4G in 230 locations, up from 53% of the population and 38 locations in late 2019. However, Movistar has not become an MVNO, and continues to manage its own traffic, IT systems and customer service. 

June news >>