After a period of consolidation in Australia, 2024 has already seen further tower transactional activity involving Everest Infrastructure Partners ANZ and key Federal Government policy introduced. Is this the start of Australia’s major digital infrastructure expansion drive?
After a raft of deals in 2022 at peak valuations Australian M&A has been quieter with fewer towers available for sale, and current valuations struggling to match expectations. Towercos have instead focused on building their companies, updating towers and seeking new tenancies. Apart from rural rollout initiatives most tower activity has occurred within the big Australian towercos. The tower M&A dry spell is over with an interesting deal from Everest Infrastructure Partners ANZ.
The deal
Everest Infrastructure ANZ has completed the acquisition of towers sites owned by Australian telecommunications carrier and ICT managed services provider Vertel. TowerXchange estimates Vertel had 200 towers, which will increase Everest’s tower count to around 260 in Australia.
“Everest is pleased to have been selected by Vertel for this transaction,” said Will Heapy, CEO of Everest Infrastructure Partners ANZ. “This expands Everest’s regional footprint to over 100 locations across Australia. With several thousand communications sites in the pipeline, Everest has established itself as a leading independent tower company serving the infrastructure needs of wireless carriers across Australia”.
“From the outset Everest offered the most compelling proposition by identifying sites which maximised portfolio valuation” said Theo Belekas, CEO of Vertel. “We look forward to Everest owning and operating these communications sites going forward, with Vertel continuing to run its own network through these sites”.
The towers currently host Vertel’s network equipment rather than a GSM operator’s equipment like a traditional towerco, but the opportunity to lease up the sites and their strategic location makes them an attractive acquisition.
Everest Infrastructure Partners are an interesting acquirer for the telecom towers as their traditional business focus on land under towers. However, six months ago in December 2023 it announced the acquisition of 546 sites from Charter Communications jointly with TowerCo in the USA. The multi-asset investor closed US$600mn in Senior Secured Credit Facilities in the same month. Backed by debt financing and with lead equity sponsor Peppertree Capital Management behind them in all markets Everest Infrastructure Partners have dry powder to continue pursuing acquisition in this and other markets.
Resiliency
Australian Prime Minister Anthony Albanese’s-led government also seems to be recognising the importance of establishing more reliable connectivity across Australian society, which is set to facilitate build activity and increased resiliency in existing infrastructure.
The Federal Government’s recently amended Telecommunications in New Developments (TIND) policy, published last February, is set to reshape the landscape for property developers. The updated policy now includes provisions for mobile telecommunications infrastructure, specifically targeting residential developments with more than 50 lots.
Under the amended TIND policy, developers are expected to engage MNIPs and MNOs early in the development process to ensure mobile connectivity is considered along with other essential utilities. However, despite it being Federal government initiative, its implementation may vary depending on the adoption of complementary rules by state and territory governments.
And earlier this month, the government also announced A$17.4mn (US$11.5mn) in funding to be allocated for its Telecommunications Disaster Resilience Innovation (TDRI) program. One of the recipients was Indara, who will now be deploying solar panels to sites as part of a solution to keep telecommunications infrastructure operating in the event of a power failure in the local area. The work is in collaboration with Optus and NBN.
It is part of the overall goal from towercos in the country to build enough towers to meet the growing needs of the country, in the process servicing MNO needs and evolving their relationship with them. The country’s largest towerco is Amplitel. The company is focused on giving its MNO customers accessible data, beneficial from an engineering standpoint, by so far covering 5,000 of its towers with digital twins – more than half of the portfolio of 8,200 sites, which consists of 5,570 mobile and 2,630 nonmobile sites. Amplitel is in process of completing digital twins for all of its towers by 2025.
Australia is heading towards a phase in its digital infrastructure aspirations, and it seems that the country’s towerco players are responsive to the task at hand.
A more in-depth look into the Australian government’s collaboration with the tower sector in enhancing the country’s connectivity plans to be published on towerxchange.com next week.
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