Monthly News Roundup: November & December 2022
A round-up off all the latest news in the global tower industry
Pakistan: Jazz inches closer to a Deodar sale
Jazz, the Pakistan subsidiary of multinational operator Veon, is close to completing the sale process of its 10-12,000 tower unit Deodar in Pakistan. The deal is valued at between US$600-960mn with a per-tower valuation of US$60-80,000. However, a depreciating local currency (PKR) and high inflation threatens to derail any sale agreement due to a disparity between Jazz’s valuation and what any buyer is willing to pay. While the current bidders have not been publicly named, TowerXchange understands that TASC Towers, TAWAL and Engro Enfrashare have all expressed interest in the portfolio.
Jazz has plans to spend the capital across several avenues such as paying off debts which are becoming more expensive with inflation. The MNO also paid 50% upfront for spectrum and needs capital to pay the other 50% in instalments owed in US dollars. Some capital will also be used to drive ongoing 4G rollout as 20-30mn people remain without service in the country, as well as exploring new revenue opportunities in digital infrastructure. Jazz recently launched a video demand app and is looking at fintech and a digital retail banking license among other new services.
Pakistan: Telenor seeks a sale of its Pakistan business unit
Norwegian multinational MNO Telenor announced it is selling its Pakistani unit due to competition and rising costs, having run a strategic review back in July due to rising energy prices. The sale will include Telenor’s tower network of around 7,500 sites. While the operator’s subscriber base grew 6% YoY, its ARPU fell 10% and in Q3 reported a 22% YoY earnings decline. Citigroup is reportedly struggling to find potential buyers for the business unit which is valued at around US$1bn. The first round of bidding took place in November and although the companies involved were not named, the parties involved are Middle Eastern and Asia-based.
Despite the MNO’s poor recent performance, Telenor is the 2nd largest MNO in Pakistan with a strong subscriber base and while slow to rollout due to the sale process the operator has a good 4G network. A merger may be exactly what the market needs to reduce competition and increase MNO volume. In 2016 Jazz acquired Warid Telecom which brought significant benefits including cost reductions, expanding customer base and generating additional revenue for network investment.
Iraq: TASC Towers completes acquisition with Zain for 5,100 sites
TASC Towers has completed its acquisition of Zain’s 5,100 tower portfolio in Iraq, marking the entrance of the country’s first towerco. The deal is the second of four expected acquisitions as part of TASC’s SLB agreement with Zain for their regional portfolio. TASC launched operations in Jordan back in February and are now pending on the closure of Zain’s 500 towers in Bahrain and 2,300 in Sudan and South Sudan. TASC is set to reach over 10,500 towers by the end of 2023 with Zain’s towers alone, not including any other potential deals.
Local Iraqi operator Korek Telecom is also considering a tower sale while Asiacell (Ooredoo’s Iraqi subsidiary) is part of the operator’s ongoing regional tower sale. Between them another 11,000 towers may be on the market with significant potential for TASC to grow in Iraq, or for another towerco to enter the market.
Oman: Helios Towers completes acquisition of Omantel deal
Pan-African towerco Helios Towers has closed its acquisition of Omantel’s 2,519 tower portfolio for a total of US$495mn. 227 IBS sites remain to be closed following extended regulatory involvement for US$53mn while just over 100 sites appear to be remaining with the MNO. This is typical for the region as sites considered strategic or sensitive are required to stay with the operator. The deal includes a minority stake with local investor Razika Fund.
Tom Greenwood, CEO of Helios Towers, commented “We are delighted to close the acquisition of Omantel’s tower assets. The transaction represents our first in the Middle East, and we enter one of the fastest growing markets for mobile infrastructure in the region with our valued local partner, Rakiza. Since announcing the transaction last year, we have built a talented local team and instilled our business excellence principles, and we now look forward to working with Omantel, a great long-term partner, and the other MNOs to drive the growth of mobile communications across Oman.”
Algeria: Djezzy and Tunisie Telecom test 5G networks
Djezzy has tested 5G in partnership with Huawei and Nokia, confirming the capacity of its network to support the deployment of 5G technology. The MNO is planning further tests in co-operating with ZTE as part of a programme issued by Algeria’s telecom regulatory body ARPCE. Djezzy is also investing heavily in 3/4G to continue its network expansion as the Algerian government has prioritised national 4G LTE before commercial 5G service introduction. However, a commercial 5G launch has been hinted at by the end of this year.
Tunisie Telecom has also carried out demonstrations of its 5G mobile services as part of the International Francophonie Summit in Djerba. The demonstration was conducted with technical support from Ericsson, and the MNO is aiming for a commercial launched in either 2023 or 2024.
Regional: e& and Ericsson partner on network sustainability
E& and Ericsson have signed an MoU over COP27 to explore initiatives to reduce energy consumption and build more efficient and sustainable networks. The MNO plans to accelerate the decarbonization of its network infrastructure by exploring energy efficiency in radio equipment and software features. This comes after e& committed to a net-zero operation by 2030 and aligned with the UAE’s Net Zero 2050 Strategic Initiative. The MNO hopes to target scope 1 and 2 emissions by improving energy efficiency and sourcing renewable energy among other initiatives.
France: TOTEM inks deal with Iliad for access to all sites
Iliad, the owner of French MNO Free Mobile, has signed a long-term agreement with TOTEM which gives the MNO access to all of TOTEM's sites. Free Mobile, being France's newest MNO needs to increase its coverage to compete with Orange, SFR and Bouygues. As of November, Free Mobile had the highest number of operational 5G sites (16,152), followed by Bouygues Telecom (8,634), SFR (7,539) and Orange (4,850) and collocating on TOTEM sites will enable it to continue to expand in both urban and rural areas. TOTEM France manages 19,155 macro sites in France with 58% ground-based towers, 30% rooftops and 12% other. ARCEP has pushed all operators to increase coverage and develop new PoPs.
Spain: Cellnex trials new renewable energy source, mulls using it further
Cellnex has completed a pilot power-back up project replacing a diesel generator with aluminium air batteries on one of its sites in Albacete.
The modules developed by Israeli cleantech company Phinergy store energy produced by hydropower in blocks of aluminium. The aluminium is combined with oxygen from ambient air, using air electrodes in a process that generates no pollution. Once the energy stored in the aluminium has been used, it becomes aluminium oxide and can be processed again and converted into aluminium. Aluminium air batteries are lightweight and easy to transport to rural and difficult access areas. The batteries on the Albacete site generate 4KW of power which can last for approximately 20 hours.
As ESG becomes important for the industry, towercos are exploring ways to use green and renewable energy sources on their sites.
Romania: 5G auction wraps up with a quarter of frequency unsold
The auction for the 5G spectrum for bands between 700MHz and 3800MHz has concluded with only three of the country’s four MNOs purchasing frequencies. The winning bidders were Orange Romania, DigiMobil (RCS and RDS) and Vodafone Romania paying €432.6 million in total for a spectrum of 420MHz. Telekom Romania, owned by the Greek OTE, which in turn is owned by Deutsche Telekom, did not take part, leaving 24% of the spectrum slots unsold.
Orange becomes the MNO in Romania with the largest spectrum portfolio, according to the Romanian regulator's figures. The winning bidders will need to fulfil broadband coverage obligations for at least 70% of the country’s 22 million population, including urban areas, highways, international airports, railways, as well as 480 towns that have been identified as having poor coverage by current mobile communication services. The licenses start in January 2023 and will last for 25 years, apart from those in the 2.6 GHz band which are valid for 6 years.
Russia: VEON enters a management buyout deal for Russian operations
Amsterdam-based VEON will sell its Russian division PJSC VimpelCom (Beeline) to senior members of the management team led by CEO Aleksander Torbakhov.
Under the agreement VEON will receive US$2.1 billion, expected to be paid primarily by PJSC VimpelCom taking on and discharging certain VEON Holdings (Netherlands) debt.
As part of the transaction, ownership of VEON’s Kazakhstan operations will be transferred to VEON Holdings B.V. and certain inter-company loans will be extinguished. This will ensure that VEON will continue to consolidate its Kazakhstan operations, with VEON Holdings B.V. taking direct ownership of the Group’s 75% stake in Kar-Tel, which operates under the Beeline brand.
The target completion date is on or before 1 June 2023, with options on both sides for extensions in case any required regulatory licence has not yet been received.
VEON is present in seven countries - Russia, Kazakhstan, Kyrgyzstan, Uzbekistan, Ukraine, Pakistan and Bangladesh.
United Kingdom: Wireless Infrastructure Group completes 1,100 tower transfer from Cellnex UK
Edinburgh-based Wireless Infrastructure Group (WIG) has acquired 1,110 towers from Cellnex UK, following the completion of the acquisition of Hutchinson’s towers in the UK.
The UK market has two joint venture infracos – Cornerstone (a JV between Vodafone and O2 (Telefonica)) and MBNL (a JV between EE (BT) and 3 (Hutchison)). The deal enables Hutchison to monetise its stake in the JV. It also marks the closing of the last transaction included in the agreements entered between Cellnex and Hutchison in November 2020 for Cellnex to acquire CK Hutchison’s telecommunications sites in six European countries: Austria, Ireland, Denmark, Sweden, Italy, and the UK.
At present WIG has 3,200 towers in the UK. In 2019 it was acquired by asset management firm Brookfield.
Brazil: Regulator to approve 420 municipalities for 5G by 1 January 2023
Brazil’s National Telecommunications Agency (Anatel) expects a total of 420 municipalities to be approved to utilise the 3.5GHz band for 5G services from 1 January 2023. This figure represents a notable drop from the initial projection of 480 towns and cities. Moises Moreira, head of the government’s Group for the Implementation of Solutions for Interference Problems (GAISPI), cautioned that commercial launches in those locations will depend on the respective expansion strategies of national mobile operators Claro, Vivo and TIM Brasil.
Since 6 October, all 26 state capitals and federal capital Brasilia have been approved for standalone (SA) 5G connectivity, with other cities receiving the green light on a rolling basis. Claro, Vivo and TIM currently operate 5G services in all locations, fulfilling their licensing obligations.
Brazil: Licence holding ISP delays 5G launch to Q2 2023
Brazilian regional ISP Brisanet has delayed the launch of its planned 5G network, which was expected to take place by the end of the year, until the second quarter of 2023. The new timeline was disclosed by CEO Jose Roberto Nogueira during a conference call to discuss the company’s Q232022 earnings. The city of Fortaleza will host to Brisanet’s initial 5G pilot network. The company is building its network ‘from scratch’, rather than working alongside tower companies. The Ceara-based ISP acquired a trio of 5G concessions in last year’s multi-band spectrum auction: a pair of 80MHz 3.5GHz licences covering the Northeast and Midwest, plus a 50MHz block of 2.3GHz spectrum covering the Northeast. Huawei was selected as Brisanet’s 5G vendor in May this year.
Brazil: Telefonica’s 850MHz licences extended until November 2028
A total of twelve regional 850MHz licences held by Telefonica Brasil (Vivo) have been extended until 29 November 2028. The concessions cover Sao Paulo, Minas Gerais, Bahia, Rio Grande do Sul, Goias, Tocantins, Roraima, Acre, Mato Grosso do Sul, Espirito Santo, Sergipe and Mato Grosso, although there are a handful of geographic restrictions in some regions. The licences were scheduled to expire between December 2022 and September 2024.
Brazil: 5G licence holding ISP to launch mobile services in January 2023
Santa Catarina-based ISP Unifique, which was part of a consortium that successfully bid on Brazilian 5G spectrum last year, has disclosed plans to launch mobile services as early as January 2023. Its Chief Financial Officer Jose Wilson Junior told investors that the mobile proposition will initially leverage network sharing and roaming agreements, with the company expected to deploy its own mobile sites from 2026.
Alongside another fixed line operator Ligga Telecom (then known as Copel Telecom), Unifique successfully bid on a regional 3.5GHz licence in November 2021’s 5G spectrum auction. As the ‘Consorcio 5G Sul’ consortium, the companies agreed to pay BRL73.6 million (USD13.3 million) for an 80MHz block of spectrum (3620MHz-3700MHz), while ‘goodwill’ of approximately BRL69 million will be converted into investment commitments serving locations in the south of the country. Unifique holds a 62.77% stake in the JV, while Copel owns the remaining 37.23% share.
Brazil: TIM reports Q3 revenues, boosted by operations in Brazil
Telecom Italia Group (TIM Group) has reported revenues of EUR3.97 billion (USD3.99 billion) for the three months to 30 September 2022, up 1.1% on an organic basis. While domestic sales dropped 5.3% to EUR2.92 billion, turnover in Brazil jumped 24.4% to EUR1.06 billion thanks to the integration of assets formerly owned by Oi. Group EBITDA fell 6.5% on an organic basis to EUR1.59 billion, while net income fell from a profit of EUR139 million in Q3 2021 to a loss of EUR2.25 billion in Q3 2022 due to a write-off of deferred tax assets.
Brazil: Claro Brasil taps SES for Amazon satellite connectivity
Claro Brasil, operating via its corporate solutions division Embratel, has signed a multi-year capacity renewal with international satellite operator SES. The contract will enable the delivery of 4G/5G-ready mobile services via SES’s medium earth orbit (MEO) O3b mPOWER network. The contract will see connectivity extended to around 260,000 inhabitants of eight of the most isolated cities the telco serves via SES’s multi-orbit satellite network across the Amazon region. Under the renewal agreement, Embratel could potentially leverage transmission speeds of 4Gbps. SES will continue to serve other communities in the region using SES’s geostationary (GEO) satellite-delivered backhaul capacity.
Brazil: Vivo forced to cut off three million inactive Oi subs in Q3 2022
Telefonica Brasil (Vivo) cut off more than three million former Oi Movel subscriptions during the third quarter of 2022, noting that the dormant accounts did not meet its active customer criteria. The figure included 2.218 million pre-paid accesses and 797,000 post-paid accounts. Vivo ended 30 September with 97.328 million mobile subscriptions, of which 14.210 million were M2M accounts. Vivo reported third-quarter net operating revenue of BRL12.199 billion (USD2.297 billion), alongside EBITDA of BRL4.957 billion and net income of BRL1.436 billion.
Brazil: Operator Winity targets 800 cell sites by end-2023
Mobile operator Winity Telecom plans to have 800 cell sites in service by December 2023, as it seeks to fulfil the rollout conditions attached to its 700MHz licence. The target was disclosed by chief technology officer Estevam Araujo. The construction of the cell sites will be outsourced, but the infrastructure will be owned by Winity. Winity Telecom, a holding company backed by alternative asset management firm Patria Investimentos, scooped up a national 2×10MHz 700MHz licence in Brazil’s November 2021 5G spectrum auction. Winity paid BRL1.428 billion (USD276.8 million) – the highest bid for a single spectrum lot in the auction. In September the company enlisted Amdocs to support the rollout of its 4G and 5G networks across remote communities in Brazil. Winity plans to build 5,000 cell towers by 2029 and establish itself as Brazil’s first wholesale operator.
Mexico: Operator ALTAN Redes exits bankruptcy protection
Mexican open access mobile operator ALTAN Redes (Red Compartida) has exited bankruptcy protection, after receiving approval from the First District Court for Bankruptcy Matters in Mexico City. The restructuring agreement that was put in place earlier this year was approved by 94% of creditors, allowing the reorganisation process to draw to a close. In June 2022, the Federal Telecommunications Institute (IFT) approved a proposed financing arrangement between the Mexican Development Bank (Banobras, Nafin and Bancomext) and ALTAN Redes, which would result in the latter becoming a public-private partnership (PPP). Red Compartida launched its open access 4G network in March 2018. More than 100 MVNOs are now offering connectivity via the 700MHz network, which currently offers coverage to 70.73% of the population.
Mexico: China Unicom granted Mexican licence by the regulator
Mexico’s Federal Telecommunications Institute (IFT) has granted China Unicom an operating licence, El Economista reports. The concession was reportedly requested in March and awarded in July, but the decision has only now been made public. As per the article, the Chinese telco, which has set up shop in the Polanco neighbourhood of Mexico City, will initially focus on dedicated links, data transmission and capacity provision, but has not ruled out exploring the delivery of mobile and fixed service to the mass market.
Mexico: Telcel 5G coverage reaches 64 cities
America Movil-backed Telcel has revealed that its 5G network is now available in a total of 64 towns and cities across Mexico. The operator hopes to serve 100 locations with 5G by the end of 2022. 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.
Regional: AMN secures US$20mn funding for rural network expansion
Rural specialist towerco AMN (Africa Mobile Networks) has secured US$20mn of debt investment from Finnish development financier Finnfund and impact investor BlueOrchard Finance to accelerate rural network deployment. AMN aims to build 10,000 towers over 20 Sub-Saharan African countries reaching 35mn people by the end of 2025. AMN have currently deployed 3,099 sites across 12 African markets; Benin, Cameroon, Congo Brazzaville, DRC, Ghana, Guinnea, Guinea Bissau, Liberia, Nigeria, Sudan, Zambia and the Ivory Coast.
Rural coverage is a priority for governments and MNOs, who are looking to towercos for rural connectivity solutions. Other rural specialists such as NuRAN and Vanu are also partnering with operators across Africa and are successfully competing with major towercos Helios Towers, IHS Towes and American Tower for the ultra-rural tower space.
Regional: Orange selects Vanu for rural connectivity project
Orange has contracted with US-based wireless solutions provider to deploy 1,070 rural sites, 700 in the Ivory Coast, 170 in Burkina Faso and 200 in Liberia, on a Network-as-a-Service model. Orange is one of the leading MNOs in Africa exploring rural connectivity solutions while Vanu is one of Africa’s off-grid rural specialist providers.
Venu cites that the next billion cellular connections will come from rural areas, but an effective model of monetisation to make rural coverage profitable has been a challenge. However, network-as-a-service with towercos managing energy, passive and active equipment on a revenue-share model may be the future of the rural towerco model in Africa.
Cameroon: Clear Blue partners with Telia Cameroon to service MTN
ESCO Clear Blue Technologies International has started deploying its Nano-Grid Smart Off-Grid power solutions for Telia Cameroon as part of its rollout for MTN with 50 systems expected in early 2023. With three ESCOs present (Camusat’s ESCO branch Aktivco manages Orange Cameroon’s towers) in the market as well as IHS Towers, who identified Cameroon as one of their top markets in their renewable energy funding program Project Green, the country is becoming a leading space for tower energy management.
Ethiopia: Government restarts sale of Ethio Telecom stake
Ethiopia has restarted the process of selling a 40% stake in state-owned operator Ethio Telecom as well as issue a second full telecoms license. The Government hopes that the sale will raise much-needed capital to free up the economy and is attracting international companies to submit expressions of interest. However, the ongoing war in northern Tigray continues to disrupt foreign investment as the country’s stability remains tenuous. Orange has been regularly tipped as a likely buyer in prior sales processes.
Botswana: Orange launches its first African 5G network
Orange Botswana has launched the MNOs first 5G network in Africa, covering 30% of the population around Gaborone and Francistown. Orange partnered with MRI Botswana to create a connected ambulance project to allow doctors to support paramedics transporting patients to hospital. Orange hopes the launch of 5G technology will promote Africa’s digital inclusion and gain experience for the launch of 5G networks for Orange in other markets. However, as 5G remains largely unaffordable for the population the initial use-cases are mostly public sector and industrial.
Angola: Government preparing international tender for Unitel
The Angolan government is preparing to open an international public tender for market-leading MNO Unitel. Angolan Minister Diamantino Azevedo stated the move is aimed at protecting strategic telecoms sector assets and ensuring greater stability and efficiency for Unitel. This follows the recent nationalisation of two 25% stakes in Unitel seized from private companies Vidatel and Geni. Unitel is the largest tower operator in the market with a portfolio of around 1,800 towers.
Togo: Togocom hits 1,000th tower milestone
Togocom has deployed its 1,000th tower in the capital Lome, marking the culmination of a 3-year digitalisation program extending and densifying its 4G network, launching 5G services and deploying fibre across 5 regions. Currently 88% of the country and 98% of the population are now covered by the operator’s network.
Australia: ACCC plot rural coverage audit
In a plan to identify blackspots and prioritise investments heading into 2023, communications minister Michelle Rowland has announced the Australian government is preparing for an independent coverage audit. The 2022-23 budget has allocated $US13 million for investments in rural connectivity.
Cambodia: CellCard carve out builds first tower for MNO
Telemobile, a new business unit of Cambodian Cellcard that will build and manage tower and power infrastructure for the MNO, has built its first tower. The portfolio is a combination of rooftop and macro sites and will mark the first time that a towerco has taken responsibility for power in the country. CellCard are yet to disclose any plans to seek external capital, but given the high valuations APAC towers have been receiving the past two years, this seems likely in the months to come.
India: American tower and Vi come to equity/debt conversion agreement
In an attempt to bounce back from its woeful financial performance, shareholders of Indian MNO Vodafone Idea (Vi) have agreed to issue shares worth INR16 billion (USD196 million) to American Tower. Under the plan, American Tower would have the option to convert 16,000 optionally convertible debentures (OCDs) if the dues owed to the towerco under its MLA with Vi remain unpaid over the next 18 months. As of the end of Q3 2022 Vi’s debt was $US48 million and the conversion could see American Tower become 5% shareholders in Vi. Vi is American Towers largest customer in India and rent from the MNO represents 2-3% of their global revenue.
India: BSNL to begin 5G rollout in mid-2023
Despite numerous delays to its 4G network, which lags significantly behind India’s 3 private MNOs (Vi, Bharti Airtel and Jio) in terms of both coverage and capacity, government owned BSNL plans to launch 5G services in mid-2023. The revelation came courtesy of Telecommunications minister Ashwini Vaishnaw.
Indonesia: Mitratel sign agreement with Telkomsat for satellite backhaul
Mitratel has signed an agreement with fellow Telkomsel subsidiary Telkomsat to secure the use of its satellite infrastructure to provider backhaul to areas where optical fibre cannot be laid due to economic or geographical constraints (mainly rural areas). The solution will be made available to all of Indonesia's MNOs and has the potential to benefit over 11,000 towers, which represents just under one third of Mitratel’s total sites. The partnership between the two companies includes the provision of towers and a satellite communication system as a connecting network between the BTS and the telecommunication operator control center. A joint marketing scheme was also agreed upon, up to the operation and maintenance of satellite equipment.
Laos: OCK coming to town
Malaysian tower builder OCK Group has signed a shareholder agreement with Laos Ministry of Finance to expand its presence in the country. OCK Laos TowerCo will be a joint venture between the two parties, with OCK owning a controlling 70% stake. Applications for an official tower licence is ongoing. The timely entrance allows OCK to be able to tap into the new 5G industry in Laos, according to OCK group managing director Sam Ooi Chin Khoon.
Malaysia: Celcom Digi merger completes
Axiata and Telenor Asia have finalised the merger of their Malaysian opcos Celcom and Digi. The two networks will continue to operate as separate brands, but the Celcom Digi branding will be used. The companies announced intentions to start rolling out infrastructure upgrades that will gradually elevate overall network experience for their customer base. For now though, customers will continue to utilise the network of the provider they signed up to only.
New Zealand: Spark NZ Towerco gets new name: Connexea
One of New Zealands newly formed towercos has changed its name to Connexea. Spark sold 70% of its captive towerco to OTTP in July in a deal that closed in October. The company was formally known as “TowerCo” which created confusion as Vodafone New Zealand sold a portfolio that was named the same thing in the same month (for the same EBITDA we might add!).
Philippines: Tiger Infrastructure secures ADB financing
The Asian Development Bank (ADB) signed a $40 million loan with Tiger Infrastructure Philippines, to build 380 telecommunications towers in the regions of Mindanao and Visayas. The financing comprises $25 million from ADB’s ordinary capital resources and a $15 million loan from an infrastructure fund administered by ADB.
Philippines: Globe added 2,951 sites in first 9 months of 2022.
Globe has announced that between January and September 2022 it has built 2951 new telecom sites in the Philippines. Of those sites, 1887 were equipped with 5G technology. 2022 saw a stark shift in the deployment patterns of Globe and Smart, with both operators relying far more on the independent towercos that have flooded into the country. In total Globe has spent US$1.31 billion on its network so far this year.