Tower transactions in LatAm gain pace

American Tower and Nextel

American Tower is once more in the news for its recent acquisition from NII Holdings (operating in Latin America as Nextel) of 1,483 towers in Mexico for approximately US$374.3 million. With more than 7,000 towers and an early market entry dated back to 1999, AMT is the leading tower company in Mexico.

Moreover, the deal between NII Holdings and AMT includes 2,790 towers in Brazil which were sold for US$413 million. AMT has acquired and operates more than 5,000 towers in Brazil since its entry in 2000.

The deal includes a 12 year lease back clause for Nextel with the option to extend the lease for additional renewal periods. The portfolio includes towers in densely populated areas with an average tenancy ratio of one tenant per tower, leaving great opportunities for AMT to increase the ratio in the upcoming months. The final sale will be announced once the post-closing adjustment period comes to an end – possibly by the end of 2014.

Both NII Holdings and AMT have been very active in Latin America over the past few months.

At the same time of the deal, Nextel Mexico announced investments worth US$1.5 billion to upgrade its current 4G network and its plans to launch 4G LTE by Q2 of 2014. In order to raise capital needed for its 4G and 4G LTE plans in Latin America, earlier this year, NII Holdings sold its Peruvian operations to Chilean Entel – or Empresa Nacional de Telecomunicaciones – for over US$410 million.

Prior to the Nextel deal, AMT acquired Global Tower Partners for US$4.8 billion – incorporating US$3.3 billion in cash and US$1.5 billion of existing indebtedness. With the deal, AMT added 5,400 towers to its portfolio and management rights of over 9,000 sites.

Earlier this year, AMT bought 883 towers from Mexican telecom operator Axtel for US$250 million.

SBA Communications and Oi

SBA Communications is expanding its Brazilian portfolio at a swift pace with the third major deal of the year announced earlier this month.

In fact, Oi and SBA have entered into an agreement for the purchase of 2,007 towers by SBA for US$645 million. This is the second consecutive deal between Oi and SBA, which earlier this year acquired 2,113 towers from the carrier at US$300 million.

The deal is expected to be completed in Q1 2014 and it will bring SBA’s Brazilian tower count to over 5,000. With over 20% of its tower portfolio now in Brazil, SBA is now directly competing with AMT in the rush towards portfolio acquisitions. And both companies will play a leading role along with carriers in the upcoming 2014 World Cup.

Oi is among the four top carriers in Brazil with over 50 million subscribers and will lease back the sites from SBA.

The portfolio includes sites leased with all major carriers in Brazil, with an average tenancy ratio of 1.6.

Telecom Italia rumoured towers sale

It has been announced that Telecom Italia will look at selling its passive infrastructure in Italy and Brazil over the course of 2014. With 7,000 sites in Brazil and 12,000 in Italy, the company could raise almost EUR 2 billion by releasing its tower portfolio.

Brazil is heating up

In spite of various transactions by AMT and SBA, Brazil still offers huge growth opportunities. In fact, as mentioned in this article, the country would require over 9,000 towers to be built to reach its 4G coverage goals ahead of the upcoming 2014 World Cup.

TowerXchange will keep reporting on tower companies’ acquisitions in Brazil, Mexico and beyond in the next editions of the journal.

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