Usually hitting TowerXchange headlines through their succession of deals across the Americas, Phoenix Tower International enters TowerXchange’s European market coverage in 2020 announcing two European deals within two months of each other. Having established a joint venture with Bouygues Telecom to deploy 4,000 new sites in France as well as signing a deal to acquire eir’s tower portfolio in Ireland, TowerXchange catches up with PTI’s CEO Dagan Kasavana and Executive Chairman, Tim Culver to find out more.
TowerXchange: Dagan, Congratulations on your deals in France in Ireland. Can you tell us what attracted you to the Bouygues deal and the French market?
Dagan Kasavana, CEO, Phoenix Tower International: We have been operating in France via our acquisition of Digicel’s towers in the French West Indies markets of Martinique, Guadeloupe and French Guyana for over two years now and have enjoyed working with the French wireless operators on their build-out needs. As part of those relationships, we were invited to participate in the process to help support Bouygues’ build out needs in mainland France.
While there are other towercos operating in France, we saw the deal as providing PTI with the opportunity to reach scale in a market that we like and in which we have been looking for an opportunity for a while as part of a differentiated transaction. The deal gives us a unique opportunity to support the New Deal Mobile, building a portfolio of over 4,000 sites and working with a highly attractive partner in Bouygues Telecom.
TowerXchange: And what about the Irish market?
Dagan Kasavana, CEO, Phoenix Tower International: Ireland has many of the attractive characteristics that we see of other mobile markets in which we operate, namely three strong carriers and limited RAN sharing between them. Phoenix Tower has experience working with eir’s shareholders, NJJ Group, whose mobile operations have the reputation of being disruptive new market entrants challenging more established players in the market. By selling their towers to PTI, eir will be able to reallocate cash into other areas of their business, enabling them to grow and compete with Vodafone and Three.
4G adoption in Ireland is behind much of Europe and 5G will be coming to the country in a more robust manner over the next 1-2 years, both of which will present opportunities for growth in terms of colocations and new builds. The deal with eir includes a BTS component and we hope to secure further BTS contracts from the country’s other MNOs, delivering on execution and showing best in class service that will enable us to compete with not only Ireland’s independent towercos but those being created by Vodafone and Hutchison in the market. In addition to organic growth we also see inorganic opportunities in the Irish market. Ireland has a host of smaller towercos thus creating M&A opportunities in potentially rolling up such players.
TowerXchange: What do you think has been your competitive advantage in securing the deals in the face of competition from more established players in the European market?
Dagan Kasavana, CEO, Phoenix Tower International: I think in particular it was many of the same competitive advantages we have historically displayed in our expansion across Latin America and the United States. Sellers want to work with a buyer that will close a transaction quickly and professionally while delivering strong value. PTI has demonstrated that track record with wireless operators, developers and major tower owners since its inception so we think we were able to check that box. Additionally, wireless operators are looking for someone that they can trust to maintain network quality - something that we have proven through the professional and world class operations delivered across our extensive network of tower sites. Lastly, they are looking for a partner that they can trust to focus on their business long after the transaction is closed. PTI is not nearly as big as our public competitors but that is also an advantage. We are able to focus the time and attention of all levels of our organisation to address our wireless partners’ needs, not only to get to a closing, but after closing as well. We believe this strong partnership based customer focus is what helps us win opportunities away from our competition.
TowerXchange: You have achieved tremendous success in the Americas by combining organic growth, M&A activities and partnerships with developers. Do you have a similar appetite for expansion in the European market? Would you have an appetite for a minority stake in any tower portfolios that could come to market?
Tim Culver, Executive Chairman, Phoenix Tower International: In answer to your first question, yes, we think the combination of aggressive organic growth combined with new tower development, M&A activity, developer partnerships and opportunistic construction or acquisition of DAS, small cell, land under towers and other wireless infrastructure represents the right strategy across all of the markets we are in.
When it comes to the question of our appetite to acquire a minority stake, we have historically focused on opportunities to either own the towers or a majority stake in the towers. Under this model, we are able to better operate the sites and manage our regional business plan in a consistent manner across all of our other markets. It is also important to note that we have been seen as an independent ally to all of the MNOs operating in each region we do business in and this allows us to drive organic growth from all operators on our towers.
TowerXchange: You have been quite proactive in exploring fibre, small-cells and alternative new technologies and typologies in the Americas. How does Europe compare to Latin American in terms of technology and what new streams do you plan to explore?
Tim Culver, Executive Chairman, Phoenix Tower International: Fibre, small cells and distributed antenna systems are very much in use and growing across Europe and we will certainly look to make investments there when we see them. It is important however to tailor our approach to the European market as some of the market dynamics are different to those in the Americas. We always want to focus on the customer needs and as they need to build and/or dispose of this infrastructure, we will continue to explore these opportunities and certainly look to drive more build-outs and be a good partner to our customers in the same way that we were able to do across Latin America and the United States. We believe we have created strong, long lasting partnerships across two major continents with our customers and look forward to introducing ourselves to new MNOs across Europe and creating many new partnerships.
March 2020 | France
PTI & Bouygues Telecom form JV to deploy up to 4,000 sites
On 20 March, Phoenix Tower International announced that it had entered into a long-term partnership with Bouygues Telecom, forming a Phoenix controlled joint venture which will build approximately 4,000 new sites across France over the next 12 years. The sites to be built will be outside of Very Dense Areas and will be deployed as part of Bouygues Telecom’s “New Deal Mobile” regulatory obligations, designed to improve mobile coverage in rural areas and along transport routes. The PTI controlled JV will join towercos including Cellnex, TDF, ATC Europe, Hivory and Orange’s new towerco in the country which currently has around 59,000 sites (figure one).
June 2020 | Ireland
PTI acquires eir’s towers
On 25 May, Phoenix Tower International reached a deal with Irish MNO, eir to acquire their portfolio of 650 sites for €300mn. The deal also includes a built-to-suit commitment and will position eir as one of the country’s largest tower owners in a fragmented marketplace. Read TowerXchange’s analysis of the deal
Figure one: Phoenix Tower International’s tower portfolio
