Monthly News Roundup: March 2024

Tunisia’s 5G roadmap and process for spectrum license issuing have been announced by the Minister of Communication, after technical preparation to transition the country's network from 4G to 5G were finalised. The plan is to launch 5G internet services by the end of 2024, with licenses to be awarded in September. The date of TASC Towers’ takeover of Ooredoo’s tower portfolio in Tunisia is not yet known, but the announcement of 5G roll out aligns closely with the arrival of the first towerco in the market.

Greek OTE which owns MNO Cosmote, has announced it’s exploring carving out its passive infrastructure into a 100% subsidiary. The move follows OTE’s spin-off of its Customer Service, Shops and Field Technical Services units. Once completed the carve-out of approximately 4,200 towers is expected to “support the optimisation and efficiency of the Group's operations.

OTE is majority-owned by Deutsche Telekom (DT) and has not disclosed plans for further monetisation of the carved-out assets. Neither has DT announced if the towers can go under the GD Towers umbrella which currently manages DT’s carved out Austrian and German mobile infrastructure.

Europe’s largest towerco has sold 100% of its Irish business to Phoenix Tower International. The deal involves just under 2,000 towers sold at EUR 971mn, an equivalent to a multiple of approximately 24x EBITDAaL. Cellnex will use the proceeds of this deal to reduce its debt. The closing of this transaction is subject to regulatory approvals. Once completed, the deal will make Phoenix Tower the biggest towerco in the country. The company is already present there with 913 towers.

Vantage Towers has announced it will improve mobile coverage in underground car parks across the country where electric utility company Iberdrola operates charging points for electric vehicles (EV). Under the agreement, the towerco will supply multi-operator repeaters to enable mobile signal underground so EV users and chargers can connect to mobile networks and charge vehicles smoothly. According to Iberdrola, it's electric mobility network is the largest in the country.

Spanish operators Orange and MasMovil have announced they will name their newly consolidated business ‘MasOrange’ following the final approval they received to merge their businesses in the country. The 50:50 joint venture, co-controlled by Orange and MasMovil, will be managed by Meinrad Spenger, the CEO of Masmovil.

Orange and Masmovil have agreed a package of remedies in December 2023 and committed to selling spectrum to MVNO Digi Spain, owned by Romanian Digi Communications, so it can build its mobile network. In addition, Digi has the option to enter into a national roaming agreement with the JV in the future.

According to Turkish newspaper Oksijen, Xavier Niel-owned NJJ Capital has signed an agreement on 29 December 2023 to purchase 100% stakes in Turkcell-owned Ukrainian MNO lifecell, towerco Ukrtower and customer relations manager Global Bilgi but negotiations between the parties are still ongoing. The sale is expected to total just over USD500mn (EUR465mn) and includes a 1.964bn Ukrainian Hryvnia (EUR46.18mn) price tag for Ukrtower and 12.71bn Ukrainian Hryvnia (EUR298.9mn) for lifecell after all necessary legal permits are obtained.

NJJ has said the final price of the transaction will not be disclosed until the deal closes. The transaction is surrounded by uncertainty due to the fact that Russian oligarch Mikhail Fridman owns a 20% stake in Turkcell. Although Turkcell has stated that Fridman has no control over it or its businesses in Ukraine, a Ukrainian court in March ordered the seizure of a 20% stake in lifecell along with 100% stakes in Ukrtower. Turkcell has filed an appeal to get the court decision withdrawn.

Phoenix Tower International announced at the end of March that Grain Management and BlackRock have made a strategic investment in the company. The investment will support PTI’s future growth in providing tower infrastructure in existing and new markets around the world. Grain and BlackRock are joining Blackstone as investors behind PTI as they seek to further grow and expand the business.

In results SBA Communicatons has revealed it sold its assets in Argentina. It is not clear who has acquired SBA Communications’ 80 sites and TowerXchange is making enquiries. The impact is minimal on SBA Communications as the sites represent not even 1% of revenue and well under 1% of EBITDA, but the move is bearish for Argentina which sees a potential future aggregator exit the market amid its continued economic turbulence.

TowerXchange understands the towerco is up for sale and that interested bidders and in discussions to acquire the towerco and its 1,500 sites. TowerXchange is unable to reveal further details but expects to see a sale before midyear.

WOM, the Chilean start-up operator, has filed for bankruptcy in the US. A plan to refinance US$348 million in debt due in November was unsuccessful. The company states that the process “does not imply the liquidation or bankruptcy of the company”. Chapter 11 filings allow for a bankruptcy process that enable debtors to restructure to cover bond payments. Specifically, the filing allows WOM, which had approximately US$1.8bn in debt at the end of 2023, to keep operating while it develops a repayment plan, reported Bloomberg.

In a separate statement, the company confirmed that JPMorgan Chase & Co. had agreed to provide $200 million in financing. In 2022 PTI signed a US$930mn deal with the operator in Chile to acquire 3,800 towers. Transfer of these towers was due to be complete by the end of 2024 but the transfer had slowed prior to this announcement.

In their Q4 results IHS Towers revealed it had entered into a Share Purchase Agreement to sell its subsidiary IHS Peru to affiliates of SBA Communications on February 21 2024. Closing of this transaction remains subject to customary conditions, including finalisation of due diligence. The move would see IHS Towers exit its smallest market and SBA Communications grow to 521 sites in Peru on a pro rata basis.

As part of the group’s end-of-year 2024 financial results, Chairman & CEO Sam Darwish announced that IHS Towers would “leave no stone unturned” initiating a strategic review of its businesses to lift its depressed share price. In 2023 IHS was considering offloading non-core assets to strengthen its position, and in the earning call Darwish announced that the towerco was undervalued. IHS Towers will bringing in a team of strategic advisors to assess the overall business case and strategy, but it remains to be seen what the outcome of this will be.

MTN Group is working with Ericsson to upgrade and modernise its core networks in a five-year partnership to enable 5G standalone, with the number of users expected to reach 11 million by 2025. MTN was the first operator to roll out 5G across major urban cities in Nigeria, increasing coverage from 3% in 2022 to 11% in 2023; a US$120mn investment to achieve.

MTN Nigeria has committed to investing US$3.5bn over the next 5 years across its operations as part of the groups Ambition 2025 strategy. Towercos in Nigeria have seen strong organic growth in new tenancies as a result of network densification, as well as an uptake in demand for smart urban site deployments including small cells, DAS and street furniture.

Airtel Tanzania Managing Director Dinesh Balsingh announced Airtel has expanded its coverage with rural site deployments to boost connectivity in remote areas, with 30 new towers live and an aim to deploy 758 more towers in a partnership with the government. These sites will be funded by Tanzania’s Universal Communications Service Access Fund. Balsingh also urged the government to reduce taxes on mobile devices to increase penetration, helping to further drive use-cases to deploy connectivity services in the country.

Vodacom Group CTO Dejan Kastelic announced the MNO is exploring hydrogen use-cases to manage rising opex costs and reduce its carbon footprint. Vodacom signed a virtual wheeling agreement with South African state-owned energy grid Eskom to buy electricity from independent power producers and wheel it to their grid-connected towers across the country. Vodacom will work with independent private partners to deploy solar farms and wheel green energy to its network of 15,000 sites.

Vodacom is also piloting a new hydrogen-powered solution for its sites, generating 4-10kws depending on the site load. The project has shown that hydrogen offers a cost-saving benefit and helps the MNO achieve commitments to caron neutrality.

TowerCo of Africa obtained US$40mn in financing from the European Investment Bank to expand rural coverage in Uganda. The towerco will deploy 506 4G and 5G-enabled towers over the next two years, with the majority powered by on-site renewable energy. The sites are also reported to be multitenant, bringing multiple operator networks into rural areas to meet their mandated 90% geographic coverage requirements by the Ugandan telecoms regulator.

The Bangladeshi operations of both EDOTCO and Huawei Technologies have signed an MoU to introduce the country’s first advanced eco-friendly telecommunications tower made from Fiberglass Reinforced Plastics. The innovative FRP solutions will reduce up to 44% tower weight and increase construction efficiency up to 75%, which are ideal for rooftop sites in the density areas of the country. These towers are engineered not to reflect radio waves, ensuring efficient microwave transmission while their durability allows them to withstand high voltage without damage.

China Tower saw its total number of towers edge down 0.4%, as the state-owned towerco looks to emphasise on network efficiencies with increased sharing of existing site resources and an increase in its tenancy ratio. Sales performance within its tower business slipped 2.8% to CNY75.023bn (US$10.36bn), as the company seeks to invest in 5G network construction and its distributed antenna system business, with indoor DAS revenue seeing a 22.5% climb.

The number of tower sites slipped to a total of 2.046,000 – down 9,000 sites. Tenancy ratio increased from 1.65 from 2022 to 1.68 through further improvements achieved through co-location. The company gained 62,000 new telecoms service provider tenants since 2022, bringing the total number of TSP tenants to 3.424 million.

KKR Is set to invest US$400m in telecoms tower operations and expansion in the Philippines. KKR will develop and acquire roughly 2,000 telecoms towers, according to the US Department of Commerce. The private equity firm is highly attracted to the dynamic Philippines market as it looks to do more to support national infrastructure and development priorities.

Globe Telecom has completed the transfer of an additional 154 towers to MIESCOR Infrastructure Development Corporation (MIDC).It means that Globe has now offloaded 62% of the agreed 2,180 towers it has transacted with MIDC in a deal worth US$464.5m. MIDC now has 1,348 sale and leaseback sites in its portfolio, consisting of 72% ground-based towers and 28% rooftop towers. MIDC is also currently rolling out new build-to-suit towers for Globe supporting the implementation of the Philippines government’s Common Tower Policy, with the aim to improve the country’s ICT services.