Country profile: Brazil

Latin America’s largest country is the biggest and most lucrative market in the region for both tower companies and mobile operators, but it has its own unique trends. Brazil is estimated to have just over 73,000 towers, with almost all sites operated by independent tower companies. TIM, Vivo (Telefónica), Claro (América Móvil), and newcomer Winity Telecom all won 5G spectrum in the November 2021 auction, along with several ISP companies. However Winity has since handed its spectrum back. Anatel, the Brazilian regulator, continues to approve spectrum usage across new regions of the country with the aim of providing 5G access to all 5,570 Brazilian municipalities by 2026.

In 2024, Brazil welcomed another new player in the industry, Brazil Infrastructure Company (BIC). The independent tower company is finalising its investment round and aims to register with Vivo, TIM, and Claro, negotiate contracts, and begin construction. The company plans to build approximately 200 towers this year, focusing on suburban and rural areas, and has ambitions to build towers in all 27 states of Brazil.

In 2023, Phoenix Tower International acquired an independent towerco FLW Infra and its portfolio of 200 towers in Brazil, marking its re--entry into the market. Meanwhile, IHS Towers is up for sale, and Brazil Tower Company, with its 1,500 towers, is another acquisition target. Winity Telecom, which planned to build 800 new sites, faced setbacks and returned its 700 MHz national band to Anatel in February 2024.

Rural connectivity has long been one of the market’s significant challenges. Sol Internet of People, a Brazilian tech company, plans to address this by installing 100 new towers in agricultural areas, aiming to cover 20 million hectares by 2024 with 700 to 800 towers. They are collaborating with Claro, Huawei, and John Deere to enhance connectivity in underserved regions, making agribusiness a strong focus for tower companies. This initiative underscores the critical role of improved rural connectivity in boostin agricultural productivity and supporting economic growth in these areas.

Previously, in the latest chapter in the dissolution of Oi (a former Brazilian operator) was the acquisition of 8,000 former Oi towers by Highline for a ‘preliminary purchase price’ of BRL 905.1 million (US$187.2mn). By 2026, this could rise to BRL 1.697 billion, depending on how many clients Highline can add to some of the bare steel it has acquired. The disposal of Oi’s towers is bringing the dissolution to a close and is enabling Brazil’s operators and towercos to look forward to a brighter and more secure industry future.

In this evolving market, American Tower boasts the largest portfolio in the country, having successfully completed deals with Telefónica, including direct tower acquisitions and the later purchase of Telxius’ tower business, as well as agreements with TIM and Nextel (now owned by América Móvil). Meanwhile, Oi is preparing to transfer several of its towers and properties to American Tower as part of its debt restructuring strategy. Initial approval has been granted by Brazil’s competition authority, Cade, although final consent from Anatel is still pending. This agreement will involve the creation of a Special Purpose Entity (SPE) for the assets, which include towers managed by American Tower since 2013. Oi is also in discussions regarding similar arrangements with other tower operators, including SBA and IHS.

SBA Communications has established a strong presence in Brazil as well, having acquired towers from Oi and various sites from independent players. Notably, SBA consolidated 2,600 sites from Grupo TorreSur, marking the latter’s exit from the market. Additionally, during the second quarter of 2022, SBA acquired a data centre in Brazil for US$127.3mn, further solidifying its position in the Brazilian telecommunications sector.

DigitalBridge-backed Highline has been steadily growing its presence, acquiring Phoenix Tower do Brasil and Oi’s remaining tower assets. IHS Towers had also made significant investments in Brazil, completing deals with Cell Site Solutions, Centennial Towers, Skysites, and more recently acquiring Grupo TorreSur’s SP5 portfolio with a nationwide footprint of 2,100 tower sites. In 2021, IHS Towers also inked a deal with TIM to acquire a 51% stake in their fibre business, marking a major step for the towerco in expanding its service offerings on the continent.

With over 11,000 sites in Brazil alone, América Móvil’s towerco Sites immediately became a major player in the Brazilian towerco landscape. However, the market is waiting to see more evidence of the company’s openness to work with third-party operators and demonstrate its independence from América Móvil.

A headwind facing towercos is the restructuring of the industry since Oi’s bankruptcy. For example, TIM is utilising its portfolio management experience gained from decommissioning Oi to restructure emerging market dynamics with towercos. Having exceeded the initial 2023 decommissioning target, TIM has retired around 4,200 sites, marking a significant 20% increase from planned goals.

Brazil’s telecom industry has undergone significant transformation over the past decade, marked by improved financial health and regulatory challenges. The focus remains on expanding network infrastructure, particularly through fibre optic deployments, to meet growing connectivity demands. Collaborative efforts with municipalities and industry associations are pivotal in advocating for conducive regulatory environments and fostering innovation. Despite challenges, Brazil’s telecom market continues to offer robust growth opportunities, driven by technological advancement and increasing demand for reliable connectivity.