What happened this month in APAC towers? (July 2022 News Roundup)

July has been another busy month in APAC towers. Transactions in Indonesia and New Zealand stole the headlines, while three stories have come out of the Philippines this month. We learnt who would be involved in the Indian 5G spectrum auction and the operator landscape has changed across the Pacific, Mynamar and Thailand.

Remember to check out our global news coverage over at TowerXchange.com. If you want to learn more about the Asian towerco market, meet all the key players and join discussions on the future of the industry, make sure you register for TowerXchange Meetup Asia!

Australia: Telstra completes acquisition of Digicel Pacific?

Telstra have completed their acquisition of multi-country operator Digicel Pacific. Australia’s largest MNO has stumped up US$270mn of equity, with the Australian government funding the remainder of the US$1.6bn purchase price through Export Finance Australia.??

Digicel Pacific has 2.8 million subscribers across Fiji, Nauru, Papua New Guinea, Samoa, Tonga and Vanuatu. Telstra has been working closely with the governments of these Pacific nations to secure approval for the takeover, and announced that it intends to run Digicel Pacific as a separate business under its umbrella. Telstra also owns a majority stake in Australia’s largest towerco, Amplitel – carving out tower assets and securing external capital to launch the new business last year. No towerco activity is reported in any of the countries that Digicel Pacific operates.?

?India: Adani Data Networks join private MNOs for 5G spectrum auction?

Four firms have been approved to participate in India’s 5G spectrum auction, scheduled to start on July 26. Joining major Indian MNO’ Reliance Jio, Bharti Airtel and Vodafone Idea are national conglomerate Adani, under their data network brand.??

Exploring the funds committed for the auction, it appears that Adani are more interested in using the spectrum for private network purposes. Jio are set to be the biggest spenders, with between US$US6-12billion expected to be deployed for near nationwide coverage. Bharti Airtel are a close second, while cash-strapped Vodafone Idea have still put in a respectable showing, although their acquisition is likely to be more focused on strategic commercial deployment for now.?

?India: DoT tighten rules on network equipment ahead of 5G deployment?

The Department of Telecommunication (DoT) has updated its guidelines around network equipment procurement in time for the next generation of networks to start being built in India. The regulator maintains a list of “trusted vendors” which the MNOs may use freely. Under the old rules, explicit permission had to be sought before networks were upgraded with technology from vendors not on this list, but following the changes it is clearer that the case is now the same for the expansion of new and existing networks. The update follows a series of amendments in March 2021 which were primarily motivated to restrict Chinese firms Huawei and ZTE having a significant presence in telecoms networks across the country amid tension between New Delhi and Beijing.?

?Indonesia: Mitratel puts IPO capital to work with ambitious fibre plans?

Telkomsel carve out Mitratel completed its IPO in September 2021 and this month revealed it was increasing its plans to roll out a fibre optic network across Indonesia, funded by the proceeds. Previously Mitratel had outlined an annual target of 6,000km, but due to significant demand CIO Hendra Purnama stated that the 28,000+ tower company will seek to revise the target to be more aggressive. Mitratel secured a fibre optic contract of 2,117 kilometers in the first quarter of the year, which has rendered its 6,000km target too small.??

Mitratel’s biggest competitor, independent towerco Protelindo, has been investing in its fibre network for over 7 years, and manages 76,000km as of Q421.?

?Japan: Rakuten partners with TEPCO for 4G/5G base-station deployment?

Japan’s newest mobile operator, Rakuten, has been hard at work deploying its network over the past couple of years. Following its investment in JTower last year to speed this process up, it has now partnered with Tokyo Electric Power Company (TEPCO) to deploy base stations at their power grid sites. Rakuten are keen to leverage the speed and cost advantages of deploying base stations at sites by using assets directly from a power grid operator.?The two companies have formed a Joint Venture - Rakuten Mobile Infra Solution, which will begin operations immediately.??

?Malaysia: edotco launch sustainability report?

Malaysian head quartered edotco Group has released its inaugural sustainability report. The report details efforts made by the Malaysian headquartered towerco in 2021 and breaks down its commitments and achievements towards the planet, equality in its workforce and local communities it serves. The report ties into edotco’s ambitions to become a top 5 towerco globally.??

?Myanmar: Ooredoo to follow Telenor out of country?

Reuters has reported that two sources have confirmed Qatar based Ooredoo are looking at selling their Myanmar business. While a buyer is yet to be found, Reuters sources said that local firms Young Investment Group and Shwe Than Lwin were joined by Singapore based Campana Group. Telenor recently completed the sale of their business to M1 group, but regulator PTD insisted M1 partner with local firm Shwe Bain Phyu Group on the transaction.?

?New Zealand: Spark TowerCo sold to Ontario Teachers??

“TowerCo”, the tower carve-out of Spark New Zealand, has been sold to Ontario Teachers’ Pension Plan (OTPP) for US$900mn. OTPP will acquire a controlling 70% interest in the business. Spark carved out 1,263 sites into TowerCo and has retained around 250. In line with other transactions across the Tasman Sea in Australia, the transaction valued Spark Towerco at US$1.1 billion, for an FY23 Pro Forma EBITDA multiple of 33.8x.?

Spark has entered into a fifteen-year agreement with TowerCo as anchor tenant and the new independent towerco will have a build commitment of 670 new sites to be completed over the next ten years. While OTPP has significant experience investing in infrastructure assets, Spark’s portfolio marks the first major investment in telecom towers. Read TowerXchange’s analysis?

?New Zealand: Another one! Vodafone New Zealand sell towers to Private Equity Consortium?

Global asset management firms InfraRed Capital Partners and Northleaf Capital Partners have each acquired 40% of Vodafone New Zealand’s 1,484 towers. Vodafone New Zealand is owned by Brookfield and Infratil rather than its UK based namesake, with Infratil planning to reinvest proceeds from the sale to acquire the final 20% of the business. Vodafone New Zealand will enter into a 20-year agreement with the new towerco to maintain access to the towers, and the deal also includes an additional 390 sites to be rolled out over the same 10-year period as Spark.??

In a strikingly similar deal, the transaction is expected to complete in Q422 and has raised US$1.1 billion for Vodafone New Zealand, for an FY23 pro-forma EBITDA multiple of an identical 33.8x. Completion of the transaction is subject to Overseas Investment Office approval. Read TowerXchange’s analysis?

?Philippines: Frontier Tower Associates leading build-to-suit race?

Pinnacle Towers, through its local subsidiary Frontier Tower Associates, has become the first common tower company in the Philippines to reach a landmark 500th build-to-suit tower. Pinnacle sit in third place in terms of owned towers in the Philippines, due to edotco and EdgePoint successfully winning a bid for operator Smart’s towers back in April.??

Speaking at TowerXchange Meetup Asia in 2021, CEO Patrick Tangney disclosed that Pinnacle had primarily focused on building towers in more remote and rural locations across the archipelago. The company is backed by Private Equity giant KKR.??

?Philippines: Bersama Digital invests in Alliance Tower Corporation

Bersama Digital, the majority shareholder in Indonesian towerco Tower Bersama, has partnered with local investment firm Opti-Teknology to acquire a majority stake in Alliance Tower Corporation for an undisclosed fee. Under the new ownership Opti-Teknology will own 49% of the business. Alliance Towers was founded by Opti-Teknology’s equity owners, and manages 40 towers in the Philippines.??

They had plans to roll out 500 sites this year, but prior to the fresh investment had scaled back these plans. The transaction marks Bersama Digital’s first tower investment outside Indonesia, where it has employed an aggressive rollup policy of smaller towercos.?Read TowerXchange’s coverage of the news.??

?Philippines: SBA Towers Philippines secure BTS contract with NOW Telecom?

NOW Telecom, a telco that serves upper class Metro Manila residents and businesses, has signed an memorandum of understanding with SBA Communications’ Philippines towerco – SBA Towers Philippines. NOW is building out its 5G network and in a stock market filing on July 22nd announced that plans were in place with SBA. The wording implies that SBA will be used not just for macro towers but also wider digital infrastructure required for NOW’s rollout plans?

?Thailand: Merger blow for True and DTAC?

Two of the four committees established to review the proposed DTAC/True merger in Thailand have voted against the consolidation. According to sources speaking with the Bangkok Post, the law subcommittee voted 10-1 against the deal, with the consumer protection panel reaching a similar conclusion in a 6-2 vote where two committee members abstained. If the merger were approved a two player MNO landscape would have emerged in the country.

As always, if you have a story for next months newsletter let me know - [email protected]??