Three short years ago and the only major towerco to have established a presence in multiple markets across Asia was edotco Group. With towers in Malaysia, Bangladesh, Cambodia, Myanmar, Pakistan, Laos, Sri Lanka and most recently Indonesia, the Axiata carve out was the rule proving exception that made Asia unique in terms of its market structure.
In Africa, the likes of Eaton Towers, American Tower, IHS Towers and Helios Towers had been quick to embark on multi-market acquisition policies. In the Americas, SBA Communications, American Tower DigitalBridge, Phoenix Tower and now Millicom’s Towerco and American Movil carve out Sitios Latinoamerica all operate in over half dozen countries.
Europe’s rapidly growing towerco sector has seen a number of multi-country carve outs (Vantage Towers, TOTEM, Telenor Tower Holdings, Telia Towers and others) join multi-country independent players Cellnex, ATC Europe and Phoenix Tower in recent years.
Even in MENA, stc’s TAWAL was quick to diversify and made an acquisition in Pakistan earlier this year.
Despite a slower start, it looks like Asia’s towercos could be moving in the same direction. OCK Group has operated in Myanmar, Vietnam and Malaysia for a while, but their bread and butter has been as an MSP rather than a towerco. Compared to activity elsewhere in the world there has been very little ambition or perhaps opportunity for towercos to grow across regions.
In recent times, Asia seems to be falling in line with the trend of cross-border expansion. EdgePoint Infrastructure was formed in November 2020 and speaking with TowerXchange on their official launch, CEO Suresh Sidhu outlined a pan-ASEAN vision from the very beginning.
Suresh’s towerco has lived up to its word, with 9,000 towers in Indonesia under its Centratama subsidiary, over 1,000 towers in Malaysia and a successful bid to acquire 2901 towers from PLDT in the Philippines.
American Tower has also expanded beyond its Asian origins in India to establish Transcend Tower Infrastructure in the Philippines and partner with local companies in Bangladesh on Kirtonkhola Tower.
Recent news suggests that Indonesian based Tower Bersama could be next.
Bersama Digital, the majority shareholder in Tower Bersama, has partnered with Filipino investment firm Opti-Teknology to acquire a majority stake in Alliance Tower Corporation for an undisclosed fee.
About Tower Bersama
Bersama Digital Infrastructure is a Southeast Asian regional digital infrastructure platform controlled by Provident Capital (“Provident”) and PT Saratoga Investama Sedaya Tbk. (“Saratoga”). They are the majority shareholder in Tower Bersama Infrastructure, which was formed back in 2004 by the rollup of several Indonesian towercos.
Tower Bersama is listed on the Indonesia stock exchange (IBX: TBIG) with two of its portfolio companies Gihon (IBX:GHON - in which Tower Bersama has a 50.43% stake) and PT Visi Telekomunikasi Infrastruktur (IBX:GOLD - in which Tower Bersama has a 51.09% stake) separately listed.
Tower Bersama’s most recent tower deal involved the acquisition of 3,000 towers from IBS Tower, which was completed in April 2021. Previously they acquired 2,500 towers from Indosat in 2012 and acquired local infrastructure player Infratel in 2011.
As of 31 March 2022, Tower Bersama reports had 39,446 tenants across 20,760 towers for a 1.9x tenancy ratio. The company also owns and leases 111 DAS networks.
In May this year Australian asset manager, Macquarie, and Canadian pension fund, PSP Investments, spent a combined US$610 million to acquire a minority stake in Bersama Digital Infrastructure in a transaction that implied and enterprise value for the towerco of over US$6.5 billion.
Speaking at that time in a press release Macquarie Asset Management implied that the firm’s long history of a laser-focus on the Indonesian market may be coming to an end. “The MAM (Macquarie Asset Management) consortium will invest alongside Provident and Saratoga to support Bersama Digital Infrastructure in pursuing investment opportunities in the digital infrastructure sector particularly focused on telecommunication towers, fibre and data centres in this high growth region.”
Winato Kartono, one of the founders of Provident, took this a step further, saying “We look forward to working with MAM to build upon the success of Tower Bersama to create a leading regional digital infrastructure platform.”
About Alliance Towers
Under the new ownership, Opti-Teknology will own 49% of Alliance Towers Corporation. Alliance Towers was founded by Opti-Teknology’s equity owners, and manages 40 towers in the Philippines. Independent tower companies in the Philippines must be at least 20% owned, or in a consortium with, companies with at least five years of experience constructing, owning, operating and/or maintaining towers in the country.
Alliance had plans to roll out 500 sites this year, but prior to the fresh investment had scaled back their goal to 200 per year.
Alliance Towers Corporation first signed a Memorandum of Understanding with Philippine regulator and Common Tower Policy author DICT in June 2019, and were awarded a full licence in January 2021. In that time they have partnered with all three MNOs in the Philippines.
The first of these came in February 2020 when Alliance signed an MLA with upstart MNO Dito. This was followed in November 2020 with Dito awarding new sites to the towerco in the Iloilo region.
July 2020 was marked by an MLA with Smart, and Globe completed the set in December 2021. Both operators awarded Alliance further build-to-suit contracts, with Globe allocating them in Visyas and Mindanaso, while Smart awarded Alliance sites in Vismin.
CEO of Alliance Towers and Director of Opti-Tek Sherwin Hing commented that the new shareholders would be able to support Alliance’s plans to rollout new sites and support digital infrastructure developments across the country.
What’s next?
Direct Foreign Investment rules are being relaxed across Asia, and certain regulators have realised that sharing infrastructure and the neutral host model provides a shortcut to the digital transformation of their countries and economies. With this trend set to grow as expensive 5G networks are required across the region, the opportunity for international expansion for Asia’s towercos has never been higher.
Which towercos will break free of their domestic roots next? Could it be newly listed Telkomsel’s sister company Mitratel? With fresh IPO capital to deploy and new shareholders keen to see growth plans it could be a possibility.
With Australian newcomers Amplitel’s parent company Telstra completing its acquisition of Digicel Pacific could we see new untapped tower markets penetrated by the Australian market leaders?
Or could Brookfield backed Summit Digitel seek to break out of its home base in India and spread across the continent?
If you want to meet the who’s who in Asian towers to find out for yourself, make sure you register for TowerXchange Meetup Asia today. We'll be gathering the full telecom tower ecosystem for two days of discussions on 29-30 November to address the current and future shape of the market.
