The Caribbean adventure continues for Phoenix Tower International

Earlier this summer, Phoenix Tower International (PTI) announced its agreement with Altice Dominicana (Euronext ATC, ATCB) to purchase 100% of its towerco Teletorres del Caribe, including a portfolio of 1,049 tower sites for US$170mn.

The transaction has expanded Phoenix Tower International’s footprint in the country, where the company operates around 1,700 sites, and will reinforce PTI’s position as the leading towerco across the Caribbean. TowerXchange sit down with PTI’s CEO Dagan Kasavana to discuss the acquisition and explore the company’s strategy in the Caribbean as well as future expansion plans across CALA. 

TowerXchange: Congratulations on the latest deal in the Dominican Republic! Can you share some details about your total tower count in the country and across the other CALA markets where you are active?

Right now and pro forma for the pending closing with Altice, we will have around 1,700 sites owned or managed in the Dominican Republic. 

We aim to build 450 towers or more over the next three years, putting us over 2,000 sites that we will own and market in the country. Our understanding is that Claro owns and operates around 1,000 towers and there are probably around 200 towers owned and operated by other carriers. 

The Dominican Republic is a very important market for us and one that we are very excited to grow. 

PTI currently owns and/or manages a total of 4,633 tower assets across LatAm and the United States and we expect to end the year with over 6,000 sites in 12 countries across the Americas. 

TowerXchange: With operations in two Caribbean countries (DR and French Antilles), can you tell us how do you run the logistics and operations there? Are you treating the two countries “as one” for operating purposes?

We do treat the Caribbean as one operating region. We also leveraged our people in the Dominican Republic and made it a central office for critical functions throughout Latin America.  Our employees in the Dominican Republic are fantastic - very hard working, very knowledgeable and talented. We have achieved great results running various regional operations from our office there. 

However, we always make sure we have day-to-day operations and sales people in each market we do business in because we need to be close to our towers and customers. We have the appropriate people on the day-to-day basis based in the French Antilles, DR and all of our Latin American jurisdictions that stay in front of our customers and close to our towers which is quite important to continue to grow our assets and business over time.  

TowerXchange: Towercos have been reluctant to operate in the Caribbean due to the difficulties in reaching scale and operating on islands. How is PTI making it work in the region? 

First, I believe that we can reach critical scale across the Caribbean, certainly across Dominican Republic and we see other opportunities to expand our presence across the region on a scale basis. 

In term of operating, it all starts with getting the right people and seizing the right opportunities. We have really strong senior personnel located in the Dominican Republic that I am proud to work with every day. And having qualified personnel overseeing our assets and delivering strong results gives us the confidence to continue to expand throughout the Caribbean. 

TowerXchange: Are there significant energy challenges in the Caribbean? 

Backup power is very important in the Dominican Republic given that the grid does go out more than it does in some of the more developed markets we do business in. However, the customers typically have primary power established. You can establish a new meter in the tower, but it is a longer process. As a result, in many situations the second or third carriers will negotiate for power, either directly with the first carrier or through PTI so they can leverage the primary power source at the tower.

In the French Antilles, the grid is more stable and has less outages. Each carrier can have their own meters and the secondary power that is there is not as significant given the grid is more operational. 

In both markets, we have found the ability to lease up to multiple carriers, as we do across LatAm and in the United States. 

TowerXchange: Beyond those two countries, are there other attractive markets to be explored? Or do you expect more tower sale by operators in the future? 

We see other opportunities to grow across the Caribbean and other Latin American countries and we are evaluating and moving forward with those opportunities, some of which we believe we will enter before the end of the year. 

TowerXchange: Can you tell us based on your knowledge the tower counts across the Caribbean? TowerXchange has tried to gather data there for a while so any insight would be great.

I believe there are approximately 1,700 towers in Jamaica, approximately 3,000 in Dominican Republic, 1,700 in Haiti and approximately 1,100 towers in total in the three markets we do business in in the French Antilles (Martinique, Guadeloupe and French Guyana). 

TowerXchange: There was quite a biz of buzz around Cuba over the past couple of years but it seems to have cooled off. What are your views and what can you predict with regards to that market?

Cuba could become a very interesting market if they liberalise their spectrum and third party multi-national operators enter the market. It is probably less likely now that it was a couple of years ago and I am not sure how quickly it may happen. If it does happen, we certainly have strong relationships with all the carriers operating in the Caribbean and we would be very interested to work with them in the country. However, whether that is two, five or twenty years from now, it is very difficult to predict. 

TowerXchange: Are the financials of doing business in the Caribbean somehow similar to the rest of CALA? And if not, what are the key differences?

Insurance cost are a little bit higher based on the hurricane risk and as mentioned the power situation is slightly different in some markets. That being said, one of the great things of being a multinational tower company is that you really have the chance to look at the similarities of economics across all the jurisdictions we work in, from the United States all the way down to South America and beyond. 

Tower economics are phenomenal when you have multiple carriers spending on their capex budgets to expand their wireless coverage. The Caribbean, like other markets across LatAm and the US,  is seeing incredible capex spending from various wireless operators who are competing hard for subscribers. 

Additionally, with significant revenue denominated in US Dollars there is more stability in the contracted cashflow for foreign investment than other larger markets across CALA denominated in local currencies. 

The strong tower economics are very similar across CALA and that is one of the reasons we want to continue our expansion across the region. 

TowerXchange: Finally, can you give us an overview of how your operations are going in the rest of CALA also in light of the elections taking place in various countries?

The operations are fantastic across CALA and we are ahead of our budget in terms of our lease up. We are expanding in every market we are in, both through build to suit directly for our customers as well as through additional acquisitions and partnerships with some of the best developers in the region. Moreover, we are expanding in both existing markets and new markets across CALA and we will continue to have announcements as we continue to expand. 

In terms of the elections, Mexico is one of the new markets we are in and we are quite enthused about the future growth of wireless infrastructure across the country. We own 974km of fibre there and we believe this new administration will drive and create great opportunities for the infrastructure industry.

In Colombia, the election of Ivan Duque is also very positive for telecom infrastructure expansion and we are expecting new spectrum auctions that should be a catalyst for a new round of network deployments by the wireless operators. 

We are excited about the years to come in the region and continuing to build on the momentum of the brand that Phoenix Tower International has achieved so far.