Asia Marketwatch, May 2014

Encouraged by the success of the recent spectrum auction in India, and overdue consolidation in the MNO category, American Tower “is targeting to bid for India’s Viom Networks, which will help it improve its services and lower its costs... AMT gained 10,000 towers in India with its previous two purchases, with Viom it could go for consolidating its assets from all three purchases, consequently lowering the operating cost,” according to Seeking Alpha.

Cellular News reports, without citing its source, that American Tower “is thought to put a valuation on Viom at around Rs 11,000 crore (US$1.77 billion), excluding debt, which is estimated at around Rs 7,200 crore. That figure is significantly below what Viom’s shareholders are understood to value the company at though.”

Viom Networks, a Tata Teleservices and SREI Infrastructure joint venture, owns a portfolio of approximately 42,000 sites in India, boasting a healthy tenancy ratio of around 2.3 with over 95,000 tenancies from all the leading Indian operators. Tata Teleservices account for approximately 40% of Viom’s revenues, with tenancies from Bharti Airtel, Aircel, MTS, Vodafone, Idea, Uninor and BSNL among others.

Meanwhile, Hindu Business Line reports that Viom has appointed advisors to support a possible IPO. Bloomberg report that Carlyle Group and Axiata have entered bids for Viom.

Always a good source for deal rumours, TMT Finance report that another Indian towerco, Ascend Telecom which owns around 4,500 sites, has been put up for sale. Ascend is jointly owned by New Silk Route and TVS Interconnect Systems.

Please forgive TowerXchange picking up on “old news” but we weren’t covering Asia in late 2013 when, together with SCB Asset Management, True Group announced the formation of the TRUE Telecommunications Growth Infrastructure Fund (TRUEGIF). True Group will transfer to TRUEGIF 6,000 telecom towers (of which 5,845 may be leased), a core fibre optic grid of 5,112 kilometers and related transmission equipment, and 1,200,000 ports in the broadband system located in provincial areas of Thailand.

Having sold 2,500 towers to Tower Bersama in 2012, TMT Finance reports that Indosat is bringing a second tranche of 7,500 towers to market. TMT Finance continues to speculate that XL Axiata will “hive off around 8,000 towers which could be worth up to US$1.47bn. STP, Tower Bersama and Protelindo are all apparently in the running for the portfolio.” We’re not sure how to marry this rumor with the launch of Axiata’s towerco edotco, and their widely rumoured although unconfirmed launch in Indonesia. Meanwhile, the same publication suggests Tower Bersama is closing in on a deal to acquire 1,600 towers from Axis.

Shares in Bali Towerindo Sentra (Balitower) surged in it’s trading debut on the Indonesian stock exchange, raising approximately Rp35 billion (approximately US$3mn), helping fund the regional towerco’s expansion plans.

The IPO released 14.7% of Balitower’s paid capital, 88 million shares, priced at Rp400 (US$0.035), valuing the company at around US$20mn. Shares rose 50% to Rp600 on it’s March 14 debut, reaching a high of Rp1,455 rupiah a week later (US$0.13) before trading was suspended.

According to Balitower filings, the company made a profit of Rp53 billion in the first nine months of 2013.

In an interview on IDN Financials, Balitower President Director Jap Owen Ronadhi explained the company’s growth plan: “we plan to build more towers, expanding from currently 208 towers to 300-350 towers. We focus 70% of our development in the Badung Municipality, which is the tourism area with high traffic. We will also build in Buleleng and in Greater Bali.”

“The IPO proceeds were about Rp35 billion, and our total capex is Rp150-200 billion, funded by internal cash, IPO proceeds and bank loans” Asked how he saw the future of the tower industry in Indonesia, Balitower’s President Director added “the merger of Axis and XL will automatically reduce the market, while the strength of the US dollar hampers operators expansion. However there is an increase in demand for capacity, for 3G sites, and by the end of the year operators will start developing 4G LTE, which will expand our market.”

Whether a stake in state-backed Telkom Indonesia’s towerco Mitratel is sold, or whether the company is listed, remains unlikely to be determined before Indonesia’s next elections. Mitratel owns an estimated 3,000 towers, and is in the process of taking over 14,000 towers owned by Telkomsel, a mobile phone operator in which Telkom has a 65% stake.

Listed in 2012, PT Inti Bangun Sejahtera has announced plans for a rights issue of 208mn shares at Rp500 per share.