Monthly News Roundup: May 2024

Phoenix Tower International (PTI) has converted EUR1.2bn in credit facilities into a Sustainability-Linked Loan (SLL) to support its global expansion and commitment to energy-efficient infrastructure. ING acted as a key arranger and sustainability coordinator for the deal, which follows SLL principles. The SLL, maturing in 2030, sets ambitious targets including reducing greenhouse gas intensity, enhancing GRESB scores, and increasing solar and LED lighting. PTI's CEO, Dagan Kasavana, emphasised the importance of sustainability in their business strategy, while ING's representatives highlighted the significance of PTI's commitment to sustainable financing. PTI, founded in 2013 and backed by major investors like Blackstone and BlackRock, operates over 25,000 telecom towers across Europe, North America, Latin America, and the Caribbean.

QMC Telecom International Holdings LLC has secured two credit facilities totaling US$115mn to support its 5G network infrastructure investments and enhance connectivity in Latin America. The first facility, a four-year US$50mn loan from Deutsche Bank’s US Private Credit team, aims to bolster liquidity for growth investments and corporate expenses. The second facility, a US$65mn multi-country and multi-currency agreement, involves IDB Invest and Proparco and extends an existing US$49mn facility with a new US$16mn commitment. This loan, featuring a nine-year total tenor and a two-year delayed draw component, will fund infrastructure projects in Mexico, Colombia, and Peru. QMC's CEO, Rafael Somoza, emphasised the company's mission to lead in 5G network densification and sustain its growth trajectory. The financing reflects QMC’s strong market position and strategic capital allocation despite challenging macroeconomic conditions.

According to BNamericas, it is rumoured that IHS Towers has recently laid off employees in Brazil across both administrative and operational areas. JP Morgan has been engaged to find a buyer for IHS Towers' Brazilian assets. The company entered the Brazilian market in 2020 by acquiring Cell Site Solutions (CSS) and expanded its footprint in 2022 by purchasing over 2,000 towers from TorreSur for BRL1.7 bn.

Africa’s largest MNO South-African based MTN Group reported a decline in overall revenue in their latest Q1 results. Group service revenue declined 18.8%, voice plummeted 32.2% and data fell by 14.7%, although fintech revenue helped offset some of this increase by 11.4%. Macro growth, however, was positive, with total subscribers increasing by 1% to US$287.6mn and active data subscribers up 7.8% to US$149.2mn.

A big part of this decline in revenue was attributed to economic turbulence, particularly in their largest markets in Nigeria and South Africa. Network operation costs have spiked due to currency devaluations, shortages of fuel, increase in loadshedding and an uptake in theft and vandalism. Towerco financial results reported significant increases escalator costs that have been passed on to MNOs, with MTN reporting EBITDA margin declining by 2.5% due to upward pressure of inflation and forex depreciations.

Avanti has partnered with Q-KON to provide LEO satellite connectivity in South Africa, using connectivity from Eutelsat OneWeb’s GEO network for a combined non-terrestrial coverage solution. Q-KON will be able to provide end-to-end and turnkey project supply, delivery and support capabilities, while Avanti plans to make Africa a primary revenue source within the next two years.

The International Finance Corporation (IFC) is in discussions to loan multi-national MNO Airtel Africa a US$200mn loan to support the operators’ network expansion in the DRC, Kenya and Rwanda. The loan would involve modernising Airtel’s network by purchasing 4G equipment and acquisition of fibre capacity, as well as refinancing US$-heavy debt. The IFC has previously provided an undisclosed amount of financing for Airtel Africa to expand its network, which was deemed successful after two years.

Indara will receive part of the Australian government’s A$17.4m investment in boosting the resiliency of telecoms infrastructure in the event of natural disasters known as the Telecommunications Disaster Resilience Innovation (TDRI).

Indara will protect eight critical tower sites, deploying solar panels to sites as part of a solution to keep telecommunications infrastructure operating in the event of a power failure in the local area. The work, which forms the basis of its Project Protect strategy - to best mitigate against power outages, remote location, and disaster management in underserved areas - is in collaboration with Optus and NBN.

Indara’s CEO, Cameron Evans, said, “Indara is honoured to take part in the TDRI program to deliver more resilient telecommunications networks during natural disasters in rural, regional, remote and First Nations communities.”

Tower Bersama Infrastructure Group (TBIG) revealed a sustained picture of healthy gross tenancies and signs of organic growth in its latest set of financial results.

The Indonesian towerco’s site count now sits at 22,838, up from 22,175 sites the previous quarter, with an additional 117 DAS networks. TBIG currently has 41,810 tenants. With total tower tenants amounting to 41,693 on tower sites, the company’s tenancy ratio is 1.83x, slightly down from 1.87x the previous quarter.

"We are pleased to report another robust quarter of organic growth, adding 837 gross tenancies, consisting of 509 telecommunication sites and 328 collocations. Our proven ability to construct infrastructure across the diverse Indonesian archipelago ensures we remain a key partner for Indonesian telecommunications operators,” remarked Hardi Wijaya Liong, CEO of TBIG.

Sri Lanka is set to shape a competitive independent tower market landscape in the future, as legislation changes from the Ski Lankan government will encourage independent towercos to build towers in the country.

The government will amend the Telecommunications Regulatory Commission Act for the first time in 28 years, with “third party” companies being allowed to build towers.

TowerXchange estimates that there are 13,336 towers in the country, but they can only be built by the nation’s telcos, in partnership with government parties. On average 300 sites are built in Sri Lanka each year, which would offer organic growth opportunities for a towerco looking to grow or expand into the market.

The country has five MNOs - Dialog (Axiata), SLTMobitel, Hutch (CK Hutchison), Airtel, Lanka Bell – all of which other than the latter have tower assets in the country. The country’s only independent towerco is Axiata-owned EDOTCO, who currently has 1,436 towers.

“Right now when we build towers, we share it. Say if Dialog builds a tower, they share it with (Sri Lanka) Telecom and with other telco companies,” Kanaka Herath, Sri Lanka's Technology Minister said. “Similarly we are trying to give it to the third party so that it will develop faster than we have right now.”

Zain KSA has announced plans to invest US$427mn (SAR1.6bn) into 5G network expansion to 122 cities across the country, contributing to the Kingdom’s ambition to become a global hub of innovation and technology. Invested capital will increase 5G points-of-presence to over 7,000, 66% of Saudi Arabia’s population and supporting 5G-Advanced technologies which the MNO is accelerating deployment of in 2024.

Zain KSA sold its towers to sovereign wealth fund PIF last year, now called LATIS, which has subsequently been merged into Saudi-Arabian towerco TAWAL which the fund also owns. LATIS had reported a strong pipeline of build-to-suit with its customer Zain, and new 5G expansion will help further drive demand for new connectivity infrastructure.

Pakistan’s antitrust regulator has warned state-owned PTCL over their acquisition of Telenor Pakistan, which was announced last year. The Competition Commission of Pakistan completed its stage one review and found that PTCL would bolster its already strong position in the market, and suggested the deal could lead to a rise in prices and dip in service quality. Stage two of the analysis of the deal is currently underway.

Digi Belgium has opened its headquarters in the Belgian capital at the end of May but has not yet provided an official launch date as the country’s fourth MNO.

Digi is commissioning the build of its fibre network and the rollout out of its mobile network. It is still looking for locations to host its equipment, but in the meantime is renting space on the network of MNO Proximus. The new market player has promised lower prices to both its mobile and fibre customers which it will achieve by using its own workforce and internal development of services, CEO Jeroen Degadt said at the official opening of the Belgian headquarters. “We have our own technicians, customer service and software. This allows you to manage not only costs but also quality, and that sets us apart from others," Degadt shared. Currently, Digi Belgium employs about 100 people and aims to expand to some 300 by the end of this year.

The world-first pilot of a drone corridor brought by a consortium of public and private companies called NEXA has launched in Berlin. Vantage Towers, a partner, provided its infrastructure and space for the drones’ take-off and landing sites called vertiports. Following the successful launch, Vantage Towers will use this proof of concept to gain experience and know-how to allow drone ports to be installed and operated near towers on land provided by Vantage Towers in the future.

The objectives of the private-public partnership are developing the autonomous business ecosystem and commercial drone operations in the future, increasing asset sharing, data collection and machine payments.

Digi Communications has announced that it has signed a preliminary agreement with Greek OTE, majority-owned by Deutsche Telekom to acquire MNO Telekom Romania through its investment company West Network Invest. The deal is subject to several conditions, including the completion of a due diligence process and obtaining the necessary regulatory approvals. No financial details have been disclosed.

Digi has also stated that when the transaction is completed, Telekom Romania will remain in the market as an independent mobile operator.

Cornerstone and its partner WHP Telecoms have deployed the 150^th macro site for Virgin Media O2 (VMO2) under the Shared Rural Network (SRN) scheme on the remote Scottish island of Eigg. The community-owned island which has a population of under 100 inhabitants now has 4G reliable connectivity. VMO2 has defined the site as a milestone in the rollout programme in a statement on its website.

The SRN is a GBP1bn joint initiative between the four mobile network operators and the UK Government to extend 4G connectivity to 95% of the UK’s landmass by the end of 2025.