Monthly News Roundup: October 2022

The latest news coming from the Optus & AustralianSuper towerco is the unveiling of its new name – Indara Towers. The rebrand reflects the organisation's ambitious strategy to empower Australia’s digital future by providing a growing range of digital infrastructure solutions and services beyond towers. TowerXchange covers the rebrand in more detail here 

Singapore-based Pinnacle Towers has made a move into its second market with the acquisition of Bangladeshi towerco AB Hightech (ABHT). The digital infrastructure platform secured funding from KKR in November 2020 and has deployed capital in the Philippines under its subsidiary Frontier Tower Associates Philippines. It is understood that ABHT will be rebranded as Frontier Towers Bangladesh Limited, in line with Pinnacle’s branding in the Philippines. An official process is underway, with a further announcement expected from Pinnacle in the coming weeks. Read our full coverage here.

A report from the business standard has concluded that slow approval for new sites from BTRC, a lack of reliable landlords and unfounded concerns over cell tower radiation is having a damaging effect on the quality of voice services in Bangladesh’s capital Dhaka. According to the report Grameenphone need to invest in 334 new sites and Robi need 111. Meanwhile Banglalink and Teletalk both required 55 news sites in the city.

5G services were officially launched by India’s prime minister Narendra Modi at the start of October at India Mobile Congress. Since then Bharti launched services in Delhi, Mumbai, Varanasi, Bangalore, Chennai, Hyderabad, Nagpur and Siliguri. Jio hit their Diwali deadline and launched services in Delhi, Mumbai, Kolkata, Chennai and Varanasi. Jio also launched 5G wifi services in high traffic areas.

While its 5G services are still some way away positive news came out of cash-strapped Vodafone Idea this month. Previous reports indicated that Vi might lose access to Indus Towers sites due to unpaid rent. It is now understood that negotiations are underway with the two parties to arrange softer payment terms. Vi commented they would report any loss of access to the Indian stock exchange if the access is terminated.

American Tower has indicated that it may end up taking a financial stake (convertible notes that could represent a ~5% interest) in Vodafone Idea worth roughly US$200mn to settle its accounts receivable, consistent with local press reports about Vi. The company noted that Vodafone Idea is committed to paying its towers leases in full in 2023.

The fourth entity to acquire 5G spectrum, Adani Data Networks, has been awarded a full unified licence that will allow it to provide any telecom service it offers. The profile of the spectrum Adani acquired and its subsequent press releases indicate that in the immediate future it only intends to build networks for its own operations without having to rely on third parties. It re-iterated that it has no intention to enter the retail market.

Iforte – a fibre focused subsidiary of Indonesian tower owner Protelindo has completed an IDR800 billion (US$51.3m) fibre transaction. Protelindo bought 10,750km of fibre assets from PT Alita Praya Mitra. The assets predominantly serve the towers of XL and IOH located in a number of key areas including Surabaya, Solo, Malang and Bali. Redpeak Advisers acted as Protelindo’s exclusive financial adviser for the transaction. Kingston Pang, MD, RedPeak Advisers will join our fibre focused roundtable at TowerXchange Meetup Asia. Sign up today to learn more!

Telkomsel owned Mitratel outlined plans to expand its infrastructure and services beyond a core tower model in an address from CIO Hendra Purnama, Mitratel plan to offer fiber optic, edge computing, and power to tower services.  Organic growth targets see the towerco plotting to add 1,000 more towers, 2,500 collocations, and 9,000 km in 2023.  Mitratel will also collaborate with Telkomsat to provide connectivity solutions using satellite services.

Digital Nasional Berhad, the company tasked with building Malaysia’s wholesale 5G network has agreed commercial terms with all 6 of the countries 4 MNOs. It was previously expected the 6 MNOs would share a 70% stake in DNB between them, but Maxis and U Mobile opted to not take a stake. Soon to merge Celcom and Digi will take up a 12.5% stake each while YTL and Telekom will own 20% each, to total a 65% stake sale. The execution of the AAs (access agreements) are now awaiting final board approvals with a deadline of 30 October.

The first of the New Zealand’s two tower deals have now closed, with OTTP acquiring a 70% stake in 1,263 Spark towers. The new towerco is currently called Spark Towerco, but TowerXchange understands a new name will be revealed soon. Vodafone NZ announced an 80% stake sale in its tower business to private equity funds InfraRed Capital Partners and Northleaf Capital Partners with the transaction expected to also close in hot pursuit of Spark.

Frontier Tower Associates have officially completed the acquisition of the first 800 towers, out of a total of 3,529, from Globe. Miescor Infrastructure Development Corporation (MIDC) has completed the first closing phase through the acquisition of the 701 towers from Globe, out of a total of 2,180 towers that were agreed to be sold on August 12th

Reports have emerged that Smart (PLDT) are planning to sell 2,000 more towers in a deal that will see them raise an estimated $US300 million. In April, PLDT announced the Philippines first sale and leasebacks in the Philippines, selling 2,973 towers to edotco and 2934 to EdgePoint Infrastructure for $US798.7 million and $US671.3 million respectively

TowerXchange has learned that processes for the sale of Ooredoo’s North African towers are now live. In Tunisia 2,072 towers are up for sale and in Algeria its 5,000. Tunisia’s transaction should be more straightforward compared to that in Algeria where investment rules make foreign direct investment difficult. TowerXchange understands that Helios Towers, IHS Towers, TASC Towers, TAWAL, Paradigm Infrastructure and TowerCo of Africa are all looking at the assets, although more towercos may also be involved. 

After several years of trying, Zain Saudi Arabia has taken an almost irreversible step forward in the sale of its towers. In mid-October it transferred ownership of its internal towerco unit to the Public Investment Fund (PIF), paving the way for the sale of the company's towers infrastructure. PIF has changed the unit's name to the Golden Lattice Investment Company (GLI), according to a statement posted on the Saudi stock exchange said. Zain’s 8,069 Saudi towers will be transferred to GLI within 18 months from the financial completion, by which time at least 3000 sites should already be transferred over.

Stc has launched Centre3, a billion-dollar regional digital centre for the Middle East and North Africa. The new company will own stc’s digital infrastructure assets including data centres, sub-sea cables, international points of presence, and internet exchange points. Centre3’s goals include developing digital businesses and bolstering investment opportunities in communication services and data centres.

PIF has sent stc a non-binding offer to buy 51% of stc’s carve-out towerco TAWAL for SAR 21.94bn (US$5.8bn). stc report this falls in line with their growth strategy of redeploying return on investments from its subsidiaries for expansion and unlocking capital for investing in telecoms and information technology diversification, especially in developing new digital infrastructure services. At this stage there is no obligation for either party and will be subject to regulatory approval including the General Authority for Competition. Given the recent update on PIFs progress in acquiring Zain’s 8,069 sites, this could signal the consolidation of the Saudi tower market under a PIF-backed TAWAL.

Algeria’s government has presented parliament with a new General Policy declaration improving the quality of connectivity and providing universal access to high-speed internet. The Prime Minister Aimene Benaberrahmane noted that connectivity is a priority or the government. Work is currently underway to increase international bandwidth capacity and strengthen the resilience of the international transmissions network.

The Qatar Investment Authority is currently in talks over a possible acquisition of a 20% stake in several Egyptian companies including Vodafone Egypt which could be finalised by the end of this year. Reportedly the deal will help alleviate Egypt's economic challenges as a result of the Russian invasion of Ukraine. Vodafone Egypt had previously been in talks with Saudi Telecom but was abandoned in 2020 leading to a reworked shareholder agreement between the Group and Telecom Egypt.

Telenor Group has carved out its Norwegian fibre infrastructure into a dedicated fibreco, Telenor Fiber subsequently agreeing the sale of a 30% stake in the entity to an investment consortium led by KKR. In their September Capital Markets Day, Telenor announced the formation of a new infrastructure business unit to develop the operator’s assets. The company announced that it expects to also monetise a minority stake in at least one of its national towerco businesses in the next 12-24 months. 

Sweden’s regulator, the Post & Telecom Agency (Post & Telestyrelsen, PTS) has commenced a consultation to explore expanding the coverage obligations associated with licenses in the 900MHz 2100MHz and 2.6GHz spectrum bands. In the latter two, PTS is proposing that all major railway routes be included in operator rollouts; in the 900MHz band one license will require mobile broadband availability along rural roads and railway lines with PTS in consultation with local authorities to define the areas to be included.

Vodafone Group has confirmed that it has entered into talks with CK Hutchison regarding the potential merger of the two operators’ UK mobile units. Under the proposed agreement, Vodafone would secure a 51% stake in the merged entity, with CK Huchison securing a 49% stake. Gaining scale to be able to accelerate 5G rollout has been cited as a key reason for the merger between the two entities, although Vodafone has pointed out that there is no certainty that an agreement will be reached.

Grupo Torresur, a Brazilian towerco, has confirmed to TowerXchange that the final sale of its assets to SBA Communications has been completed, marking the firm’s exit from the market. The sale of Grupo Torresur’s assets proceeded in several stages. In 2019, the company sold 1,313 towers to SBA Communications. In January 2022, IHS Towers acquired 2,115 towers from SP5, Grupo Torresur’s portfolio company. In August 2022, SBA Communications agreed to acquire 2,600 sites from the firm.  

Brazil’s national telecommunications agency Anatel has offered Telefonica Brasil (Vivo) the opportunity to extend its 4G network rather than pay a fine of BRL 45.2 million (USD 8.5 million). The watchdog wants 70% of the 4G expansion work to take place in the underserved North-east region of the country. Vivo’s compliance with the matter cannot result from RAN sharing, network rental agreements or industrial exploitation contracts. Further, the sum of the costs related to the installation and maintenance must be equal to or greater than the amount of the fine. The precise indiscretion that prompted Vivo to be penalised has not been disclosed. It is unclear if Anatel’s action is related to a recent decision by the Federal Court of Goias in the Center-West region of Brazil to fine Vivo for poor quality of service in that state between 2015 and 2019.

Brazil’s national telecommunications agency Anatel has revoked Claro (América Móvil) decade-old 450MHz licence, mirroring action taken against Oi and TIM Brasil last month. The watchdog conceded that – unlike its rivals – Claro did actually utilise the frequencies. However, Claro’s 450MHz launch – in ‘several municipalities’ – was said to be delayed. Claro was given 450MHz spectrum covering rural areas of all states in the north region, as well as rural parts of Bahia and Maranhao states and greater Sao Paulo. On 13 September 2022, Anatel’s Board of Directors terminated the authorisations for the use of the 450MHz band held by Oi and TIM Brasil across various states. Both concessions were issued in 2012, with a view to providing rural coverage, but neither licence was ever used.

Brazil’s Administrative Council for Economic Defence (Conselho Administrativo de Defesa Economica, CADE) has approved – without restrictions – the purchase of 79 cell towers from Algar Telecom-backed Vogel Telecom by NK 108, a company owned by Highline. CADE’s General Superintendence assessed that the sale will not harm the competitive environment. Algar has stated that the deal ‘will enable the reallocation of resources and the concentration of efforts on other strategic projects of its interest’. The value of the transaction has not been disclosed.

Brazil’s national telecommunications agency Anatel has confirmed that the country’s national mobile operators are permitted to launch standalone (SA) 5G services using the 3.5GHz frequency band in a further five state capitals from 6 October 2022. The latest locations to receive the green light are as follows: Belem (capital of Para), Macapa (Amapa), Manaus (Amazonas), Porto Velho (Rondonia) and Rio Branco (Acre). All 26 state capitals and federal capital Brasilia have now been approved for SA 5G connectivity. The watchdog notes that a total of 5,275 SA 5G base stations have been activated in Brazilian capitals to date – double the minimum commitment previously established. This total represents 6% of the overall 93,159 cell sites in the country. By 2025, 6,370 5G base stations must be installed in the state capitals. In total, the state capitals are home to nearly a quarter of the Brazilian population.

Fresh details have emerged regarding the proposed network sharing deal between Telefonica Brasil (Vivo) and mobile newcomer Winity Telecom, as the national telecommunications agency Anatel scrutinises the agreement. Winity is aiming to secure a RAN sharing agreement with Vivo to support its independent 700MHz rollout. In return, Vivo expects to gain access to 2×5MHz of Winity’s 2×10MHz spectrum holdings in around 1,100 towns and cities. The master lease agreement (MLA) is expected to be non-exclusive, meaning that third parties will also be able to access the shared infrastructure.

Winity Telecom, a holding company backed by alternative asset management firm Patria Investimentos, won a national 2×10MHz 700MHz licence in Brazil’s 5G spectrum auction in November 2021. Winity paid BRL 1.428 billion (USD 276.8 million) – the highest bid for a single spectrum lot in the auction. Winity plans to build 5,000 towers by 2029 and establish itself as Brazil’s first wholesale operator.

Mexican Communications and Transportation Commission of the Chamber of Deputies will push to reduce the price of spectrum rights in Mexico, to speed up the deployment of 5G in the country. 

The Radio Spectrum Unit at the Federal Telecommunications Institute has submitted proposals to the Ministry of Finance and the legislature to analyse the situation of the high cost of spectrum use in Mexico, which is up to 186% higher than the international average. The high prices and delayed spectrum tenders have cost the government around MXN 4.5 billion (USD 224.9 million) this year. A 5G spectrum auction in Mexico was expected to take place this year. An auction has not materialised however, with industry citing the high price of spectrum as a major stumbling block. In Mexico, successful bidders pay an upfront fee as well as an annual frequency usage fee for the duration of the concession; with licences generally valid for 20 years the prices of the licences are far higher than the equivalent concessions in other markets.

AT&T Mexico has extended its 5G network coverage to ten new cities in the north of the country, namely: Tijuana, Mexicali, Ciudad Juarez, Mazatlan, Ciudad Obregon, Navojoa, Guasave, Ensenada, Puerto Penasco and Guamuchil. In addition, the operator says it has boosted coverage in its launch markets of Mexico City, Guadalajara and Monterrey. The company has reiterated its plan to cover 25 cities by the end of 2022.

ATC Africa and Airtel Africa have entered a strategic partnership across their Kenyan, Nigerian, Niger and Ugandan footprints to support Airtel’s network rollout. This partnership hopes to support the operators’ ongoing connectivity agenda and accelerate digital inclusion, especially to the under connected, as well as advance carbon reduction objectives. Under the agreement all new sites will adhere to ATCs new green site specifications which will reduce emissions while advancing ATCs ambitious Science-Based Targets (SBTs).

IHS Towers have announced their carbon reduction roadmap, providing a comprehensive strategy for decreasing emissions which includes cutting Scope 1 and 2 emissions 50% by 2030 from a 2021 baseline. To achieve this IHS Towers has committed $214mn in capex between 2022 – 2024 as well as delivering annul Recurring Levered Free Cash Flow (RLFCF) savings of $77mn in 2025 which is expected to generate a 30% return on investment. The company is also raising its 2022 capex guidance and now expects to spend $645-685mn, up from $545-585mn, including $110mn of the $214mn spent for Project Green. Savings will be achieved by increasing electrification of sites and deploying battery and solar energy solutions, particularly in Cameroon, Cote d-Ivoire, Nigeria, Rwanda and Zambia where diesel generator reliance is highest.

Safaricom Ethiopia has finally launched commercial services in the country, bringing much-needed competition to the market. Safaricom is now commercially available in 11 locations including the capital Addis Adaba and plans to reach a further 14 cities with by April 2023 as part of an ongoing national rollout. The operator has also announced a further $500mn spend in its first year of operation, having already spent around $1.2bn so far on its entry into the market. 

Airtel Gabon is negotiating with the government to secure 165 plots of land to expand its mobile network coverage. Airtel and Gabon Telecom, a subsidiary of Moov Africa, have both come under pressure from the ARCEP, Gabon’s telecoms regulator, to improve network coverage and quality of service with a focus on rural areas. Airtel Gabon previously announced a two year $15mn investment programme in its network as a result to achieve national 3G and 4G coverage.

The European Investment Bank (EIB) is backing MTN with EUR100mn (US$100.2mn) to accelerate 4G coverage in Nigeria. This is the EIB’s largest financing for mobile telecoms network expansion in Africa. The financing will enable the upgrading of 1,000s of sites to LTE.  

MTN Group has abandoned talks to buy Telkom South Africa due to the operator failing to keep negotiations exclusive, as well as concern over antitrust approval for reducing the markets operators from 4 to 3. MTN had previously suggested it could abandon the acquisition after Telkom’s announcement it was considering a separate bid from Rain which was submitted last Month in exchange for new shares in the operator’s capital. Since the deals collapse Telkom shares fell up to 25% after the announcement while MTN’s shares dropped by 2%.

The Tanzania Communications Regulatory Authority (TCRA) has completed its auction of 7 additional frequencies in the 700MHz, 2300MHz, 2600MHz and 3500MHz bands for a total of $187.5. The buyers include Vodacom, who purchased one block of the 700MHz and 2600MHz banks for $2.5mn and 3.3mn and two blocks in the 2300MHz range for $34.4mn. Airtel received two blocks of $2600MHz and 3500MHz for $39mn and $21.1mn while MIC secured two blocks of 3500MHz for $34mn and Viettel acquired one block of 2600MHz for $30.2mn.

Airtel Zambia has completed its acquisition of 60MHz of additional spectrum in the 800MHz and 2600MHz bands for $29mn. This new spectrum will be used to support the operator’s network expansion for mobile and fixed wireless services including a 5G rollout and provide capacity to accommodate growing demand for data in the market.

State-owned MNO Telecel is expected to be placed under corporate rescue due to serious financial problems, according to a report from the Communication and Allied Service Workers Union of Zimbabwe. The report suggests that unless the government takes immediate action to support the operator, Telecel will inevitably go into liquidation; at the end of last year Telecel’s liabilities outweighed its assets by 16:1.