January – March 2018
Australia: Government to auction 3.6 GHz band for future 5G rollouts
On 8 March, the Australian government announced that 125 MHz of spectrum in the 3.6 GHz band will be sold at competitive auction, in anticipation of 5G service provisioning. Currently the band is used in the country for fixed satellite service earth stations, point-to-point links and site-based wireless broadband services. The auction is expected to take place in October.
Bangladesh: Bangladesh Telecommunication Regulatory Commission holds spectrum auction
The February auction in Dhaka is paving way for 4G rollouts in Bangladesh. Market leader Telenor spent US$155mn on the 1800MHz band, while Banglalink picked up both 2100MHz and 1800MHz bands for a total of US$308.6mn. The other two MNOs Robi Axiata and Teletalk did not take part, and will instead rely on their existing spectrum for provision of 4G services. 4G licenses are available to the MNOs at a fee of US$1.2mn. Mobile users are expected to enjoy 4G services in the coming weeks.
China: China Mobile secures new commercial terms with China Tower Corporation
After negotiations and discussions “at arm’s length,” China Mobile’s pricing agreement with CTC has been adjusted in favour of the MNO. Part of the revisions include the cost markup rate dropping to 10% from 15%, as well as tenant discount from 20% to 30% for towers shared by two lessees, and 30% to 40% for three lessees, with the extra 5% discount entitled by the anchor tenant unchanged. The agreement came into effect on January 1, 2018 for a period of five years. This comes at a time when CTC is seeking to IPO and optimise its valuations, while the three MNOs are under pressure to minimise costs; all three MNOs have shares in CTC.
India: American Tower acquires Vodafone’s standalone towers
ATC has closed the deal for Vodafone’s 10,200 towers for an enterprise value of INR38.5bn (~US$592.9mn). In the Vodafone India-Idea Cellular merger announcement in March 2017, both MNOs indicated their intention to sell their individual standalone tower businesses to strengthen the combined financial position of the merged entity. The merger is expected to complete in the first half of the current calendar year. Completion of Idea’s sale of its standalone tower business to ATC is also expected in the first half of this calendar year.
India: Reliance Jio emerges as largest network by base stations
Market disruptor MNO Reliance Jio has expanded to ~448,000 base stations across the country, growing significantly since it entered the market in mid-2016 with 150,000 stations. By comparison, for the same period in March, Bharti Airtel has ~431,000 base stations, while Vodafone follows with ~295,000 and Idea Cellular at ~279,000. Once the merger between Vodafone and Idea goes through, it will result in the largest network, though roughly 60,000 overlapping sites will be shut down.
India: GTL Infrastructure seeks dues and compensation from Aircel
The towerco who had Aircel as its largest customer is seeking to intervene in the MNO’s bankruptcy proceedings, in an attempt to recover Rs400 crore (~US$61.68mn) in rentals owed and compensation for premature contract termination of Rs12,000 crore (~US$1.85bn). Tower rental contracts were to be valid through 2030.
India: Bharti Infratel and Indus Towers sing different tune on their tower strategies
While in late 2017 there were talks of Bharti Infratel buying out the Vodafone stakes (42%) in their joint-venture towerco Indus Towers, as well as those of other shareholders (Idea Cellular at 11.15% and Providence at 4.85%), then selling to investors, there appears to be a change in plan. The latest news out of India speaks of a merger between Bharti Infratel and Indus Towers, with an eye to capturing value further down the line, once MNO consolidations shake out and remaining players re-invest in infrastructure to meet data demand.
Indonesia: Protelindo adds 1400 towers through KIN acquisition
The country’s largest independent towerco has entered into agreement to acquire PT Komet Infra Nusantara (KIN), marking global private equity firm Providence’s exit. KIN currently owns approximately 1,400 towers and more than 2,000 tenancies. Protelindo owns and operates 14,854 towers as of Q4-2017. Purchase price for the shares is approximately IDR1.4trn (US$101.78mn), subject to adjustments at final close. Protelindo has indicated KIN’s tower portfolio as highly complementary to its existing portfolio. Singapore-based Redpeak Advisers is the financial advisor for the transaction.
Japan: Infra-sharing agreement between Rakuten and Kansai Electric Power
While no towercos exist in the Japanese market, electronic e-commerce firm Rakuten is seeking to leverage the infrastructure of electric utilities across the country as it seeks to enter the MNO space. It has applied for 4G spectrum from the government and pending approval, will look to use Kansai Electric Power’s transmission towers, utility poles, telecommunication towers and other infrastructure to start.
The Philippines: Telco PLDT returns spectrum and waives associated reimbursements
According to the officer-in-chief of the Department of Information and Communications, “PLDT has fully complied with its divestment of 10 Mhz of the 3G radio frequency that was previously assigned with CURE. This frequency is now available to a new major telco player.” PLDT is also waiving its right to be compensated for the return of the spectrum.
The Duterte administration has been keen to introduce a third telecoms provider in the country to increase competition and improve services; PLDT and Globe Telecom are the incumbents.
The Philippines: MNO Globe Telecom talks tower asset divestment
Since the government announced its intention to introduce a common tower policy in the country, Globe has indicated interest to sell either a portion or all of its tower assets, totaling over 8,000 sites across the Philippines. The money raised will go towards sustaining Globe’s capital expenditure and maintain its consistent dividend policy according to CEO Ernest Cu. According to the government, the Philippines is under-served with ~17,000 towers to 100mn people, with an estimated 50,000 more required to put it on par to some of its counterparts in the region. Presidential Adviser on Economic Affairs and ICT Ramon P. Jacinto has been quoted saying at least two to three towercos could play a role in the future rollouts.
Myanmar: New towerco MNTI signs ESCO contract with Voltalia
MNTI, which has been awarded BTS orders with fourth operator MyTel has selected Voltalia, an international player in renewable energies as an energy partner. The agreement covers an initial batch of 171 telecom towers, of which 80% are not connected the national electricity grid. The contract is for 10 years, with Voltalia responsible for power supply to the sites at 2kW each, located in the Bao and Ayeyarwaddy regions of Myanmar.
Sri Lanka: edotco unveils ‘Smart Lamp Pole’ initiative in Sri Lanka
Keeping with its commitment to bolstering the country’s telecom and energy sectors, edotco has introduced Smart City solutions in Colombo, Sri Lanka. To meet aesthetics requirements in urban settings, the solutions are sleek, camouflaged, green and blend well with town-planning for modern cities. The smart urban connectivity systems also have integrated advertising space, environmental information sources, smart street lighting, smart parking and even flood monitoring systems. “The ‘Smart Lamp Pole’ is an energy efficient telecoms infrastructure solution which will benefit cities and communities around the country. As a company with regional experience in infrastructure deployment and management, and a member of the local business community, we believe it’s our responsibility to contribute our resources and expertise to add value to the country,” said CEO Suresh Sidhu.