TowerXchange’s analysis of the independent tower market in Asia

COVID-19 is inevitably driving data demand in Asia, creating an unprecedented need for both capacity and coverage across the continent. The imminent arrival of 5G in many regional markets will just continue pushing that surge. Telecom infrastructure has never been more important and with over 70% of the continent’s towers in the hands of Mobile Network Operators, the industry will experience a considerable trend of carve-outs and tower sales over the next few months. Regional operators need to expand and upgrade their networks to monetise consumer demand while getting ready for 5G, and growth is guarantee through BTS, co-locations and plenty of network amendments, while towercos continue exploring new services and technologies on the way towards a more holistic approach to connectivity.

The opening of the Philippines and Bangladesh’s return guarantee great BTS opportunities, while Indus and Bharti’s merger and the sale of IGT are going to reshape both India and Myanmar’s tower markets. In the Philippines, DITO has reportedly rolled out over 1,000 sites and incumbents Globe and PLDT are finally embracing the towerco business model by signing the first BTS contracts with the licensed infrastructure leaders that landed in the country a couple years back.

In the meantime, Indonesia has resumed M&A activities with a few sizeable tower deals over the last few months. In Australia, Optus’ sale and Telstra’s restructure open the door for new investors to acquire very attractive portfolios in one of the most advanced and sophisticated markets in the region. With 5G making an entrance, towercos are set to continue investing in fibre while exploring new technologies and business models to satisfy the increasing and more complex needs of their MNO clients in the region. Telcos will need to deploy a lot of new capital in both spectrum acquisitions and network expansion, hence monetisation will become a priority for many of them. 2020’s madness has not stopped the continuous reshape of Asia’s diverse tower ecosystem and the months to come are going to be transformational.

Australia: After announcing the carve-out of its non-mobile-related assets into a new entity back in 2018, Telstra has just announced another critical shift; Australia’s market leader is restructuring the business into three different entities: InfraCo Fixed, InfraCo Towers and ServeCo. The first one will own and operate Telstra’s passive infrastructure assets like fibre, ducts, data centres, subsea cables and exchanges. InfraCo Towers is set to own the company’s tower portfolio, with Telstra’s CEO hinting a potential sale of the assets during the announcement. Finally, ServeCo will effectively be the “telco” arm, owning the active parts of the network, including the radio access network and the spectrum. The three entities will split over 250,000 kilometres of fibre optic cable, 360,000 kilometres of ducts, 8,000 mobile towers, masts and poles, 5,000 exchanges, two data centres, and access to 400,000 kilometres of subsea cable. The new businesses are set to continue supporting Telstra’s 5G expansion—the company provides the technology to over 40% of the country’s population— and the new tower unity becomes an incredibly attractive acquisition target for global infrastructure leaders and investors.

Moreover, Optus, which has been also rolling out 5G sites alongside Ericsson, is also exploring the sale of its portfolio. Singapore-based Singtel, the major shareholder of the MNO, has been working with Bank of America to monetise a portfolio of around 400 sites that is worth US$1.3bn, which presents another great opportunity for international investors and local towercos that are looking to inorganically grow their portfolio in the country.

Both towercos and MNOs will need to work together to raise the necessary investment for 5G networks deployment while exploring further collaboration and sharing initiatives on small cells, base stations hotels and fibre. Leading towerco Axicom is in fact exploring new technologies and its CEO Graeme Barclay has publicly confirmed that the company is already increasing capacity in existing sites while investing in small cells and new solutions such as power, fibre, cabins and BTS on a shared access and shared cost model.

The federal government has also announced a US$25mn plan to secure connectivity and avoid outages caused by bushfires. This resilience package will help MNOs to strengthen their towers on those locations that were most affected by the incidents earlier this year.

For now, the “traditional” tower landscape remains pretty much unchanged with Axicom (formerly Crown Castle), BAI Communications and a handful of smaller independent towercos owning around 2,600 towers and a further 1,800 towers having been recently erected by nbn, the Government-owned new broadband network. However, Optus’ sale and specially a potential deal with Telstra will create a completely new towerco market in one of world’s most attractive TMT markets.

Bangladesh: After years of legal disputes, regulatory hurdles and no organic growth, the Bangladesh tower market is finally moving in the right direction.

Back in March, the Bangladesh Telecommunication Regulatory Commission (BTRC) finalised the long-awaited Service-Level Agreement (SLA) that enabled licensed towercos to start operating in the country by providing firm guidelines on how MNOs and their infrastructure counterparties should engage commercially. Based on the new regulation, MNOs will not be able to rollout their own towers hence towercos are their only deployment option.

Until this year, edotco – who owns 10,000 towers following the transfer of assets from sister company Robi –was the only towerco effectively operational in the country. Since March, the other three licensed towercos – Summit Towers Limited, Kirtonkhola Tower Bangladesh Ltd and HighTech Consortium Ltd – have been in conversations with all the MNOs as they are keen to diversify from edotco. Further, Grameenphone and Robi were not able to import any equipment for their network rollout due an ongoing lawsuit, but that restriction has been now lifted and both telcos are expected to restart ordering BTS imminently. American Tower has formalised its joint venture with local player Kirtonkhola, and we have learned that at least two of the towercos have already agreed commercial terms with one of the MNOs for a considerable BTS order following the approval of the SLA. Now, the others should follow.

Cambodia: Cambodia is home to 16.4mn people and according to Q418 data from GSMA Intelligence, it has a 126% SIM penetration rate and 20.6mn mobile connections. The market features six MNOs – Cellcard, Metfone, SEATEL, Kingtel, Cootel  and Smart – and just under 10,000 towers.

The establishment of Chinese-backed MNOs Seatel, Kingtel and Cootel is creating a very competitive environment that will drive new deployments. Earlier this year, the government announced its intention to release the 700MHz band for 5G development in 2020 and the MNOs have been actively testing and trialing the technology across the country’s main cities.  Market experts predict around 200-300 new towers to be built in Cambodia per year until 2021, when 5G will drive an increase of new typologies such as urban poles and small-cells.  In the meantime, some MNOs are finally contemplating a sale of their assets to towercos.

Further, the Ministry of Post and Telecommunications (MPTC) has called all MNOs to increase their infrastructure investment and improve the quality of mobile and internet services as COVID-19 is creating a demand surge. The Telecommunication Regulator of Cambodia (TRC) will be conducting inspections of cellular signals across the country while the Ministry has urged all operators to install the necessary equipment and additional towers needed to improve their signal.

Market leader Smart Axiata invests US$70 to US$80mn per year on its network expansions, while State-owned Telecom Cambodia (TC), Cambodia Fibre Optic Communication Network(CFOCN) and Viettel have installed over 44,000 km of fibre optic cable in the Kingdom.

The rapidly expanding city of Sihanoukville, which has become one of the fastest-growing in Asia due to the continued growth of casinos and online gaming businesses, has attracted the attention of many new Chinese investors and many start-ups and industrial business are emerging in one of the hottest markets in Indochina. Moreover, China Tower is expected to make an entrance and regional investors from Malaysia and other neighbouring countries are also looking at the Cambodian tower market. For the time being, two towercos are active in the market. edotco made an entrance in 2018 with the acquisition of 325 sites from SEATEL and now owns and/or manages 3,623 towers across the country. Local tower builder Camtowerlink also has a modest footprint in Cambodia. Both edotco and Camtowerlink are offering IBS, small cells as well as camouflaged solutions in the country.

Key tower deals in Asia 2008-2020 (excluding carve-outs)

India: The Indian telecom market is in turmoil; it has actually been for a while, but at last, we are seeing some green shoots. In fact, India is the second largest telecom market in the world, and it has surpassed US and China to become the largest data consuming economy.

The Supreme Court has granted 10 years to Vodafone and Airtel to pay their dues, releasing financial pressure from the MNOs that are expected to increase rollout investments imminently. Consolidation on the telco front has had a negative impact in the tower industry, but a healthier ecosystem has arisen with three solid private operators and a smaller government-owned entity that will focus on completing their 4G rollouts, increasing capacity in urban areas while also expanding towards uncovered rural regions across the country’s vast geography. Data demand grows exponentially and telcos can only capitalise the opportunity through considerable network investments.

On the tower front, Bharti and Indus are finally going ahead with their merger. Organic growth is picking up again and new forms of wireless infrastructure including small-cells, poles and DAS are being deployed across the country. FTTH deployment is growing too and industry sources expect over 20% of the new towerco revenue to come from non-traditional towers.

Further, the government has an ambitious plan to accelerate digital infrastructure development through different initiatives, including Digital India and BharatNet.

Indonesia: Indonesian towercos reported very good levels of new orders at the beginning of the year. Now, MNOs ex-Java expansion as well as densification efforts across Java’s most populated areas indicate that positive levels of new orders and especially co-locations will continue. Several SLB deals over the last year have improved MNOs’ balance sheets and both XL and Indosat have reinvested that cash into their networks. Overall, Indonesian MNOs have proved their resilience during the pandemic and their healthy financials will guarantee plenty of business for the tower industry.

M&A activity is set to continue—and 2021 can be incredibly busy if the government finally decides to remove telecom infrastructure from the negative investment list. Last month, Telkomsel announced the sale of 6,050 sites to sister company Mitratel for US$700mn, as state-owned Telkom plans to consolidate all its tower operations under Mitratel ahead of the company’s upcoming initial public offering (IPO). XL don’t have much more to sell, but Indosat still owns a portfolio of around 3,000 sites and Ooredoo is currently defining its global tower strategy. Carlyle wants to exist STP and Centratama, a leader in indoor coverage who recently acquired 1,000 sites from XL, has also solicited some bids to foreign funds.

In the meantime, towercos will continue looking beyond steel and grass, with fibrerisation becoming a top priority for the industry. Based on RBC Capital Markets’ Tower and Mobile Infrastructure Recap, the percentage of BTS towers built with fibre connectivity this year is 60-70% vs 10% in 2019.  Market leader Protelindo is targeting over 48,000km of fibre for both FTTT and backbone connectivity before the year ends and competitors STP and Tower Bersama will follow, pushed by MNOs.

Japan: Japan is one of the most sophisticated mobile markets in the world. Traditionally, towers have been seen as a source of competitive differentiation and the initial interest in carving-out a towerco a few years ago tailed off. However, the arrival of Rakuten, the country’s fourth operator, and the new government strategy could completely shift Japan’s telecom infrastructure market. Japan’s executive is pushing MNOs to reduce their prices and has already released some initial guidelines for infrastructure sharing, which could eventually open the door for new and existing infrastructure players.

In fact, MNOs SoftBank Corp and KDDI have established 5G JAPAN, a joint venture that will promote infrastructure sharing based on the mutual use of sites to accelerate the deployment of 5G networks in rural areas.

Japan is famous for having the fewest number of subscribers per tower in the world – reportedly around 500 – suggesting a staggering tower count of around 220,000 for a nation of 127mn people and a landmass of just 378,000sq km.

Following last year’s allocation by the Ministry of Internal Affairs and Communications (MIC),  NTT DOCOMO, KDDI and Softbank Corp have commercially launched 5G, while new entrant Rakuten Mobile is expected to launch its services in the next couple of month as COVID-19 has caused unexpected delays on its network rollout. The four MNOs are expected to invest a total of US$14.4bn in a five-year deployment phase.

TowerXchange understand several tower companies are trying to establish themselves in the Japanese market, but to date their penetration remains negligible.

Laos: In 2018, Laos opened up to towercos, with the national government and local firm Click Lao Marketing and Consultancy signing an agreement with China Tower Corporation (CTC) to establish the Southeast Asia Tower company. According to local news sources “the Southeast Asia Tower Company will mainly be engaged in the construction, maintenance and operation of communication towers, base stations, power supplies and other supporting facilities, as well as that of indoor distribution systems and transmission systems in Laos.”

Last year, edotco presented a filing at the Bursa Malaysia announcing its entrance into Laos via the purchase of an 80% stake in local entity Mekong Tower Company Ltd. (MTCL). The filing stated that “the Laos tower market is expected to undergo intense growth in tandem with a national drive towards 4G adoption, with an estimated demand of no less than 5,000 towers over the next 3 years.”

The country is home to four MNOs – Beeline, ETL, M-Phone and Unitel – and holds great potential for growth with only 80% SIM penetration and 5.6mn mobile connections (and 7mn inhabitants). The estimated count for the country is 8,000 sites but this figure is likely to go up thanks to the newly launched towerco activities.

 

Malaysia: After ending talks of a potential merger with Telenor, Axiata Group is now targeting other potential alliances and acquisitions in both Malaysia and Indonesia.

edotco now owns / manages over 11,000 towers in Malaysia, following the initial carve-out of 4,000 sites from Celcom (Axiata). State-backed and independent towercos own a further 3,500 while OCK, YTL, Naza Communications and Omnix run portfolios ranging between 5,000 and 150 sites.

There are an estimated 22,682 towers in Malaysia, representing almost 2,000 mobile subscribers per tower. A new ground based tower in Malaysia costs around RM300,000 (US$69K).

After a week of unprecedented political turmoil earlier this year, Malaysia has now a new government and the spectrum auction that was scheduled for Q120 has now been delayed. In May, the Minister of Communications allocated the 700MHz, 900MHz and 2600MHz bands to some MNOs but that order has now been cancelled and the government plans for 5G remain uncertain.

In the meantime, new builds have slowed down during the pandemic but MNOs have been ordering more co-locations and upgrading specific points of their networks as a response to the great surge on data demand, particularly in urban and residential areas. 

Over the last few months before COVID-19,  MNOs had been busy completing their 4G rollout and fiberising their towers, while trying to figure out whether to partner with pure fibre players or other MNOs or towercos, as towercos remain cautious about fibre integration in a very populated fibre landscape. Cellcom has now completed 90% of its 4G coverage and U Mobile has been one of the busiest MNOs as the company was quite behind in terms of 4G development. The operators are also exploring different collaboration initiatives such as RAN Sharing and fibre swaps, for which they’d be force to pay a premium to their tower partners. However, the challenge for monetising this trend is around difficulties checking whether this is done at a software or physical level-while the contract clauses only protect passive infrastructure

Despite political changes and the current regulatory uncertainty, the 5G spectrum allocation should take place before the year ends. The MNOs will continue the completion of their 4G networks and the tower industry can expect considerable growth, not only on macro sites but specially on  microcells, lamp-poles, DAS and IBS once the new bands are allocated.

Mongolia: Mongolia is home to four MNOs – G-Mobile, MobiCom, SKYtel and Unitel – and 4.2mn mobile connections with a population of 3.1mn (GSMA Intelligence – Q418). Following the separation of the telecom and infrastructure businesses in 2013, a few infrastructure providers now run towers, active equipment, fibre and microwave backhaul across the 1.5mn sq km Mongolian landscape.

There are approximately 1,000 towers in the country and more than half are shared. Infrastructure providers in the country include State-owned ICNC, Mobi Network and Sky Network.

Myanmar: With around 62% of sites in the country owned by towercos, Myanmar remains an exciting market in which to do business for entrepreneurial towercos. To date, there are over 23,300 sites in Myanmar.

Market leader Irrawaddy Green Towers is up for sale. Malaysia’s telecom giant Axiata Group has been shortlisted and Guodong Group of China as well as private equity firm CVC Capital Partners have also expressed an interest on the transaction, that could be value at around US$800mn. The outcome of this deal will definitely reshape Myanmar’s tower market with the entrance of new capital or perhaps the consolidation of edotco as the biggest player in the country.

Latest entrant MyTel, which has already invested more than US$1bn in infrastructure, continues to be one of the main growth drivers. In a very Viettel fashion, Mytel has developed many small infrastructure subsidiaries across Myanmar to satisfy its growing BTS needs—and many of those entities are becoming acquisition targets for the bigger towercos. In Myanmar, Viettel has also relied on independent towercos as the company recognised it would not be able to achieve its coverage commitments without their support and expertise. So far, Mytel has built over 3,500 new towers and co-located on over 5,000 sites. The company has already overtaken Ooredoo and will now challenge Telenor in both number of sites and subscribers.

All four operators are currently testing 5G and regulator PTD estimates that the country could be launching the technology in two to three years. In the meantime, MNOs will continue expanding their networks through BTS and co-locations on macro sites while also testing new solutions and typologies in urban environments. Grid power is still unreliable even in major cities and power remains the main issue for the industry. More than 50% of the sites are in off-grid locations hence towercos and MNOs rely on gensets and batteries while exploring the benefits of hybrid systems, renewables and lithium-ion batteries to power and cover their operations.

Myanmar market share (subscribers)

Nepal: Two years ago, Axiata Group closed the acquisition of a majority stake in Nepalese market leader Ncell from TeliaSonera, in a deal believed to be worth US$1.365bn. There have been no tower deals in Nepal to date, but this move by the Axiata Group may pave the way for edotco to enter the market in the near future.

Almost two years ago, the Nepal Telecommunications Authority (NTA) published a draft Infrastructure Development and Sharing Regulation, seeking request for proposal from towercos to provide telecom infrastructure services. Although at least eight international firms were interested, the Ministry of Communications and Information Technology (MoCIT) has not issued any license yet. Last summer, NTA threatened to issue an MNO licence to an international player due to concerns about the lack of competition and investments in the telecoms market, which is currently dominated by Nepal Telecom, Ncell and Smart Telecom.

Although both NTA and the Ministry of Communications and Information Technology (MoCIT) have been working on different plans to promote infrastructure sharing and the entrance of towercos in the market, although we haven’t seen any official move so far. In the meantime, Nepal Telecom is building new sites as part of its 4G network expansion.

TowerXchange will be looking to undertake further market studies for a dedicated report on Nepal’s telecom infrastructure landscape.

New Zealand: There are early signs of a nascent tower industry emerging in New Zealand, where Spark and Vodafone New Zealand have substantial but ageing tower networks, newer entrants 2degrees have leveraged co-location where possible while building a few hundred towers. 2degrees may have an appetite to sell their towers and partner with a towerco on BTS. Parallel infrastructure is substantial, while the need for improved rural coverage, particularly on the South Island where tourist and agribusiness drive demand, has prompted the government’s Rural Broadband Initiative to invest in over 100 towers. A total of around 4,000 macro-towers are supplemented by around 7,000 rooftop sites, primarily used in the larger cities.

Philippines: After almost three years of regulatory disputes and several delays, new entrant DITO has finally started its network rollout and the company’s CTO Rodolfo Santiago confirmed that it has already built 1,532 sites. The MNO has been building most of its sites through a local subsidiary and turnkey providers and aims to build over 500 more sites before the year ends. DITO, owned by business mogul Dennis A. Uy and China Telecom, is initially investing more than US$ 2.5bn on its rollout and is expected to also rely on towercos for new BTS orders and co-locations imminently.

On the regulatory front the Department of Information and Communications Technology (DICT) has done its homework too. In May, it issued a circular with the guidelines for co-location and sharing of passive telecommunications infrastructure, which has pushed incumbents Globe and PLDT to sign the first orders with their towerco partners, with local sources estimating around 1,000 new towers to be built by them over the next few months. On the tower permitting side, the government has also issued a Joint Memorandum Circular (JMC) signed by the DICT and other agencies to expedite and streamline the processing of common tower permits to a matter of days, a key milestone for the industry in a country where obtaining a permit used to take up to a year.

While PLDT and Globe complete their 4G rollouts, both companies have already started their network upgrade in preparation for 5G, with the latter stating that its 5G coverage has been expanded across 17 key cities in Metro Manila, Visayas and Mindanao. Both fibre and small-cells will play a critical role on this new phase of deployment.

Operationally, powering all the news sites in remote locations will be a key challenge as MNOs expand their coverage into new areas and towerco have already expressed an interest in assisting their customers directly or through ESCOs.

South Korea: South Korea boasts one of the most sophisticated telecommunications infrastructures in the world, cultivating an insatiable demand for high speed mobile broadband among its citizens.

Mobile broadband penetration in South Korea is above 99% and fibre has been widely deployed. South Korea is a three-operator market featuring SK Telecom, KT and LG Uplus. The Ministry of Science, ICT and Future Planning (MSIP) has tried multiple times over the years to license a fourth MNO, however, failed again in February 2017 as none of the three applicants (Sejong Telecom, K Mobile, and Quantum Mobile) met the criteria.

The Ministry of Science and ICT (MSIT) has revealed that around 260,000 users have signed up for 5G since the three country’s MNOs launched services. According to the figures provided by MSIT, there are now 54,202 5G base stations in operation across South Korea. TowerXchange is starting to pick up the first faint signals that towerco activity may be emerging in South Korea.

Sri Lanka: There are approximately 8,000 towers in Sri Lanka and edotco to date owns 126 sites. It’s unclear to date what happened to the nearly 3,400 sites that edotco managed until the end of 2018. High levels of bilateral sharing means tenancy ratios are closer to two than one all over the country. Sri Lanka is now mostly covered with 3G and 4G, which is driving need for cell site densification. Dialog and Mobitel hold all of the 4G spectrum, and any other players that want to offer this will need to engage in RANsharing.

Bharti Airtel had been rumoured to be looking at selling its 2,500 towers but seems to have cooled on the idea.

Earlier this year, Sri Lankan MNO Dialog Axiata Group signed two agreements with the country’s Board of Investment (BOI) to receive US$254.1mn. BOI’s investment will facilitate USS190.7mn to Dialog Axiata and US$63.4mn to its Dialog Broadband Networks subsidiary. The investment will support the expansion of mobile and fixed 4G LTE networks, the evolution of IP and fibre-optic networks as well as the development of the group’s Wi-Fi and broadband networks, while also supporting the deployment of 5G technologies in the future.

Moreover, MNO Hutch has completed its island-wide deployment of 4G services, covering now 90% of the population. The telco has also merged the 2G and 3G networks of Hutch and Etisalat Lanka after an investment of more than US$100mn, and plans to designate US$200mn for its network expansion over the next couple of years.

Thailand: With five operators and over 50,000 towers, Thailand could be the perfect tower market but to date, only one company (DIF) acts in the infrastructure industry as a fund with around 16,059 towers and over 1mn km of fibre.

Thailand’s #2 MNO True Move has sold 788 telecoms towers, 1,795km of optical-fibre cable and 3,700km of fibre to the Digital Telecommunications Infrastructure Fund. The assets were valued at THN15.7bn (US$513mn), and True Move will lease back some of the towers and fibre through 2033. True Move also acquired shares in the Digital Telecommunications Infrastructure Fund worth THB4.74bn (US$154mn), maintaining their stake in Thailand’s leading towerco, which had issued new shares at 30%.

To date, DTIF is the only entity owning towers beyond MNOs. The fund owns over 13,000 towers and 1mn km of fibre.

Recently, the long-term dispute between AIS and state-owned TOT has been resolved. The two MNOs had been embroiled in a five-year dispute over the ownership and right to use 13,000 towers, which TOT claimed fell within a build-operate-transfer agreement. The resolution sees a TNB300mn (US$9.8mn) monthly service fee for AIS to continue using the towers replaced by a ten-year deal in which AIS pays to lease TOT’s towers, and TOT uses AIS’s space and maintenance services. The deal is reportedly worth THB28bn (US$915mn).

TOT is also planning to finalise its merger with the other State-run operator, CAT Telecom, by Q2 2020.

On February, The National Broadcasting and Telecommunications Commission (NBTC) completed its 5G multiband spectrum auction, raising around US$3.2 bn from the sale of 48 concessions for spectrum in the 700MHz, 2600MHz and 26GHz bands. Advanced Info Service (AIS), through its subsidiary Advanced Wireless Network (AWN), secured 23 out of the 49 licences, followed by True Corp and its subsidiary True Move H Universal Communication (TUC) with 17 licences, TOT with four licences and both Total Access Communication (DTAC) and CAT with two concessions each. The auction’s coverage obligations will push MNOs to aggressively deploy new sites in unpenetrated areas, but restrictions of ownership as well as the power and influence of local developers and contractors might continue difficulting the entrance of international independent towercos.

Vietnam: According to the Ministry of Information and Communications (MIC), Vietnam has now 128mn mobile phone subscribers. Although the market is quite mature and saturated, its telecom industry still generated around US$16.8bn in 2017 (a 7.3% growth YoY) and the local Government is actively promoting the development of telecom technologies and IT initiatives to meet the objectives of sustainable economic growth and international integration. More recently, the government has recently announced plans to sell large stakes in State-owned Mobifone and VPTG (which owns MNO Vinaphone) by the end of 2020. MNO privatisation – with a potential entrance of international investment – and the long rumoured sale or carve-out of Viettel’s towers, could create a whole new and very interesting telecom landscape in the country.

MIC is also preparing the 2600MHz band spectrum auction, which is expected to enhance LTE coverage and capacity across the country. Winning bidders will be required to begin network deployment within 24 months of receiving their spectrum licence, which will notably drive demand for new sites and equipment.

Viettel undoubtedly dominates the game and has around 50% market share with 63mn subscribers. The country’s largest mobile operator by subscribers is now aiming to add ten million 4G customers this year and is rolling out 2,400 new LTE base stations  across the country to provide coverage to 3,700 underserved areas. Further, the MNO plans to introduce 5G services in June this year, using network equipment and software developed by itself.

Currently there are an estimated 90,000 towers in Vietnam, and the majority of them remain in the hands of the operators. The towerco ecosystem is still fragmented and there are dozens of very small tower companies owning portfolios of less than 100 sites.

With 2,673 towers as of Q219, we can consider Malaysia-based OCK the market leader. OCK is not planning to build more assets due to mobile market constraints but they are very keen on consolidating its portfolio and TowerXchange has learned that they are currently negotiating some acquisitions.

Golden Towers and Nisco are the other known towercos of some scale with 350 and 300 towers respectively. The former is now building 100 more towers after closing a BTS deal with MobiFone.

Tenancy ratios are around 1.5. MNOs do not have plans to sell and leaseback any tower assets and infrastructure sharing among operators is still limited, but there is still much room for growth and positive expectations. Lease rates, which are all denominated in local currency, have grown recently due to inflation and an increase in rental fees. The average cost is VND15mn per month (US$640 per month), notably lower than Myanmar (US$900-1500) but still higher than in India (US$550) and China (US$350).

The market has almost reached its peak in terms of subscribers however everybody across the value chain can find a role in this challenging environment. While the government still needs to grasp the benefits of infrastructure sharing, operators can improve their efficiency and relieve their balance sheets by modernising their networks and transferring some responsibilities to towercos. Infrastructure providers can find great opportunities in urban areas, where fibre, 4G and the future deployment of 5G will require significant network investment. Ultimately, vendors can also play a substantial role in this modernisation process by providing more sophisticated monitoring systems and helping both towercos and operators in optimising their assets.

State-owned MobiFone serves approximately 34.8mn customers, followed by VNPT-Vinaphone with 20.5mn. Smaller players Gmobile, with 6mn and Vietnamobile with 3.7mn are trying to increase their share of the pie and compete with the three giants.

MobiFone has good relationship with towercos and around 30% of its sites are in hands of independent players 

Asia heatmap

Comments (3)

It doesn’t seem to make sense that South Korea only has 30K towers as the country has one of the most extensive networks there. What do you think?

Kieronbackup

We haven’t studied South Korea in detail as there are no towercos.

Kieronbackup

Thanks to a recent tip we can attribute around 1,000 of those unidentified towers in Malaysia to UMobile.

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