Andean Telecom Partners (ATP) – a DigitalBridge backed towerco that is now active in Peru, Colombia, Chile, Ecuador, and Paraguay – has confirmed the acquisition of BTS Towers from the IFC and private equity investors Cartesian Capital Group, and Amzak Capital.
ATP now own approximately 1,200 sites in Chile, 1,130 sites in Colombia, 1,100 sites in Peru, 170 sites in Ecuador, and 10 sites in Paraguay, for a total of 3,610. The expansion into Paraguay marks the first country that is not in the Andean group that ATP have expanded into – and yet more expansion could be on the cards soon. “We are interested in any market across the Americas where there is good growth potential.” CEO Daniel Seiner disclosed.
That being said, Seiner was able to confirm that Mexico and Brazil (where Digital Bridge portfolio companies Mexico Tower Partners and Highline both respectively operate) were not on its immediate hitlist.
Following a long career in the banking world, Seiner led Torrecom Partners and Torres Unidas Management until the latter was acquired by ATP in December 2017. Seiner leads ATP from their head office in Hollywood, Florida – where TowerXchange caught up with him following this deal announcement.
TowerXchange: Congratulations on the acquisition of BTS Towers! Can you start off by telling us what was attractive about the towers and why ATP wanted to include them in your portfolio?
Daniel Seiner, CEO, ATP: The BTS towers portfolio was entirely complimentary to our existing towers in Colombia and Peru, and the sites offer an excellent opportunity for us to expand our reach in those markets.
The towers are of a high quality and are all ready to take additional co-locators. They require very little additional capex requirements, so they offer an opportunity for us to monetise them by increasing tenancies with additional operators. All of the sites we acquired are ground-based towers.
In addition, the sites we acquired in Ecuador and Paraguay allowed us to enter into two exciting new markets. We wanted to make our move into Ecuador as we see similarities with our existing markets of Chile, Colombia and Peru in terms of network under-penetration and hence plenty of opportunity for organic growth.
Paraguay is a market where we are still exploring our options and honing our future strategy.
TowerXchange: Can you tell us more about your outlook for the Ecuadorian market and more about both the organic and inorganic growth opportunities?
Daniel Seiner, CEO, ATP: We have a significant pipeline of build to suit sites that we have inherited from BTS. We have already established a local team in Ecuador, and we are already working to generate organic growth activities with the local operators. We are also interested in entering the Fibre market in Ecuador and continue to leverage our small cells expertise from our operations in our incumbent markets.
Ecuador is a dollar-based economy, which makes it attractive to operate in, because we have seen FX instability in Latin America and devaluations in currency have impacted those economies.
From an inorganic perspective, ATP are interested in further M&A activity in Ecuador in both the tower and fibre space.
TowerXchange: ATP has differentiated itself in Chile, Colombia and Peru by expanding its offering beyond the core macro tower business. How will this continue to be the case in Ecuador and Paraguay?
Daniel Seiner, CEO, ATP: Entering the fibre market through organic growth and potential further M&A activity is a key objective in Ecuador.
Throughout our markets, ATP sees huge potential in combining the infrastructure of macro towers, mini macros and small cells, and also connecting these structures with dark fibre that can be offered to the full telecom ecosystem across the region. We see this as the next layer of efficiency and as a way to remove parallel infrastructure. It makes economic sense for all parties for a neutral, third-party host to offer these services to all carriers in a market.
We are also entering an era where it is more difficult to build towers in certain markets. There is social opposition and lots of red tape that make build to suit macro sites challenging and slow. But, at the same time, the operators need to increase capacity to deal with urban densification of their networks, as a result of the increased data demand brought around by factors such as COVID-19, and they also need these technologies to support their 5G rollouts.
Therefore, demand for site typologies that extend beyond traditional ground-based towers is at an all-time high. We have extensive experience building, managing and commercialising these sites, so we want to take full advantage of this wave of demand.
We are also seeing other towercos across the Americas expanding into various types of data centres, which is something that we are also exploring.
TowerXchange: You mentioned there are challenges obtaining social buy-in for towers in some of the markets that you operate in. How do ATP try to address this?
Daniel Seiner, CEO, ATP: Yes, unfortunately that is the case. Our primary strategy is to make sure that we are in constant dialogue with the local communities where we are building sites, and doing so in partnership with our tenants. We want to be a good neighbour, ensuring that the installation of a tower causes as little disruption as possible. Its also important that local populations understand the benefits that this type of deployed infrastructure can have on their daily lives.
In these scenarios, the most effective solution involves compromises for all four stakeholders (towercos, MNOs, local municipalities and local residents).
Normally our diplomatic approach works well, because we take the time to discuss this with the community early into our planning stages. We are well-financed, so we can afford to take a little bit longer to get local buy-in and then save operating costs as there is less need for expensive security systems and responses to vandalism-provoked maintenance.
If it really comes down to a situation where the local community won’t accept the tower, our philosophy is we’d rather sacrifice building specific sites to maintain good will. ATP gain very little from erecting 3 towers, if it means that we are ostracised from a market where we could build 300 or even 3,000.
TowerXchange: One of the big themes of 2022 will be how towercos are evolving to meet increased ESG pressures from investors. How is ATP approaching this?
Daniel Seiner, CEO, ATP: One example we are very proud of on the social side of things is an initiative we are running with underserved local schools in Peru. We are providing these schools with high-speed connectivity, which is allowing over 12,000 students to strengthen their digital skills, integrating technology in their studies and thus contributing to their comprehensive training.
If we look at the environmental side of things, I think most towercos in the Americas have a different situation to other regions in the world like Africa or Asia. Operators manage power on pretty much all of our sites, and the grid is generally consistent across the continent. This means that the emissions from sites is typically pretty low, especially considering that around two thirds of the energy from the grid is hydro-powered.
While we are doing all we can to support our tenants to help them manage power efficiently and effectively, there is less of a role for towercos here than elsewhere in the world.
Want to learn more about the Americas tower market? TowerXchange will be hosting Meetup Americas in Miami in July. Dates will be announced soon, but if you want to play your part in suggesting topics or themes for this year’s this agenda please get in touch – jack.haddon@towerxchange.com.
