Asia News

News in brief from the tower industry across Asia

Afghanistan: Operational challenges may lead to tower deals

Some MNOs in Afghanistan are considering divesting their tower networks to increase efficiency and remain competitive. This could open the Afghan market for new tower transactions in the near future. There were 5,897 towers in Afghanistan in 2015 of which ~1,500 are on the balance sheet of Frontier Tower Solutions, a subsidiary of AWCC. Roshan, MTN and Etisalat’s towers remain operator-captive… for now!

Bangladesh: Merger between Robi and Airtel approved by PM

Bangladesh’s Prime Minister’s office approved the planned merger of Robi Axiata and Airtel, which was first announced in January. Malaysia’s Axiata Group and India’s Bharti Airtel had been in talks since last September. The merger will create Bangladesh’s second largest MNO, behind market leader Grameenphone.

Bangladesh: Robi transfers shares in edotco Bangladesh after Robi/Airtel merger

Robi is set to transfer 31.01% of edotco Bangladesh’s shares back to edotco Group as the Malaysian tower management company looks to get a full licence to run its operations in the country. Before the share transfer, Robi held 51% of edotco Bangladesh’s shares. Edotco, and other stakeholders, are lobbying the Bangladeshi regulator (the BTRC) to relax a requirement that licensed towercos in the country have no relation to licensed MNOs.

Bangladesh: BTRC to develop infrastructure sharing policy

Bangladesh’s Minister for Post and Telecommunications has confirmed that the government will look into developing a policy and guidelines to govern the renting of tower infrastructure, and said that measures to encourage or require operators to share infrastructure would also be considered, noting that the cost-sharing would benefit consumers. According to the BTRC, 36,000 mobile towers have been installed so far in the country, whereas only 24,000 are needed to achieve full coverge.

China: China Tower Company IPO mooted for late 2017

China Tower Company, the world’s largest tower operator, is on or ahead of schedule to launch an initial public offering (IPO) towards the end of next year. China Tower was created to hold, manage and expand the tower assets of all three of the nation’s MNOs, and now manages more than 1.55mn tower sites, valued at more than CNY270bn (US$41bn). In February this year, China Tower’s general manager, Tong Jielu was quoted as saying that the proceeds of the IPO would be used to diversify the company’s business into ventures such as charging stations for electric cars.

China: Guodong makes preparations for 2017 listing

Independent towerco Guodong is reported to be in pre-IPO mode, and is seeking a 2017 listing. Guodong, China’s largest independent towerco, was established in 2008, and has a portfolio of ~6,000 towers spread across 25 of China’s 31 provinces, with a particular concentration in densely populated coastal cities.

China: CTC finalises lease agreement with nation’s three operators

China Tower Company (CTC) has finalised their lease agreement with China Mobile, China Telecom and China Unicom for a five year term retrospective. A 20-30% discount plus an extra 5% discount for the anchor tenant will be provided for new towers when co-located. Site costs and electricity costs will be reduced 40-50% with second and third tenant, plus another 5% discount for the anchor tenant. This brings the average lease rate of CTC to an unprecedented US$325.

India: Bharti Infratel buys back shares to return surplus funds

Bharti Infratel confirmed with a regulatory filing that it will buy back 47mn shares for Rs 425 each in a deal valued at Rs 2,000 crore, in a bid to return surplus funds back to shareholders.

India: Reliance Jio seeks to partner with Bharti Infratel and American Tower on 4G rollout

Reliance Jio may partner with Bharti Infratel and ATC to roll out new cell sites according to Bank of America Merrill Lynch ahead of its December commercial launch. Jio has approached the country’s two largest tower companies with a figure of around 35,000 tenancies and has pushed hard for a discounted rate. The two companies are so far not taking the bait as they feel Jio does not have time to build for itself. Jio is also leveraging tenancies on Reliance Infratel sites.

India: Ramboll launches new engineering centre in Hyderabad

Danish multi-disciplinary engineering, design and consultancy firm Ramboll launched a new engineering centre in Hyderabad to fuel its telecom business both in India and other markets. The 230-strong Ramboll Hyderabad team focuses on the analysis and design of mast towers and monopoles in addition to tower marketing and technical support as well as manufacture and sale of towers. Ramboll India has undertaken tower loading validation analysis services for major industry players in India such as Indus Towers, VIOM and Bharti Infratel.

India: GHMC requires towercos and MNOs to increase strength of towers to cut down on accidents

GHMC Commissioner Dr. B. Janardhan Reddy directed the Cellular Tower Agencies (CTA) to take immediate steps to ensure people’s safety by redesigning cell phone towers that could withstand heavy winds. Representatives of Indus Towers Ltd., Reliance Jio Infocomm, Viom Networks Ltd., Tower Vision India, ATC Telecom Tower, GTL Infrastructure, Bharti Airtel, Vodafone and Idea Cellular participated in the meeting held at the GHMC Headquarters. The GHMC Commissioner threatened to register criminal cases against the cellular tower agencies in the case of accidents caused by faulty infrastructure.

India: Tejinder Kalra named new COO of Indus Towers

Indus Towers has appointed Tejinder Kalra as the Chief Operating Officer of the company. Kalra joins Indus Towers from Nokia, where he was the Global Head for Bharti Business. He worked with Nokia for over 13 years, and had been a pivotal part of their growth story. He was also the sub-region Head for Central, East and Western Africa in an earlier role where he helped set-up Nokia’s Airtel operations in Africa.

India: Reliance Communications and Aircel announce merger

Reliance Communications has set a merger deal with Aircel and the company is preparing for the merger with the announcement set to happen after the commercial launch of Jio 4G. With a net worth of approximately Rs 50,000 crore, both RCom and Aircel are likely to transfer Rs 14,000 crore debt to the merged entity. The deal, which was to materialise in May, was delayed by a month due to a disagreement over the debt component.

India: American Tower creates virtual management team post Viom Networks acquisition

A virtual team has been set up to manage the operations of ATC India and Viom Networks post-merger, although it may take up to a year for the legal merger to be finalised. The top fifty positions have been identified, and work continues to assign the remaining roles across both companies. Out of the top fifty positions, 60% have been given to ATC incumbents, and of the 17 circles designated by ATC, 12 will be headed by ATC executives.

India: Indus Towers’ passes 50,000 green site landmark

Indus Towers has launched the second edition of its Annual Sustainability Report for 2014-15, showcasing its efforts at creating cleaner and greener telecom networks.  The report also reinforces Indus’ commitment to protecting the environment, enhancing engagement with communities, while continuing to create value for all stakeholders in a sustainable manner.  With a focus on correlation between strong economic performance, social responsibility and respect for the environment, the report is also an indicator of Indus Towers’ take on sustainability in every aspect of the organisation. Indus has now converted over 50,000 green sites, slashing diesel consumption primarily through the use of energy storage technologies.

India: New Silk Route raises stake in Ascend Telecom to 70%

Private equity major New Silk Route (NSR) has raised its stake in Ascend Telecom Infrastructure to 70% over the last four years through equity infusions. Previously, NSR’s stake in the company stood at 63%, with the remainder held by TVS Interconnect Systems and IL&FS. Ascend Telecom Infrastructure has about 5,200 towers with a tenancy ratio of 1.93.

India: Department of telecom takes steps to increase mobile coverage

Mobile coverage is to be extended to all of the 55,669 unconnected villages in India over the next five years. The Department of Telecom has taken several measures for expansion of telecom services in rural and remote areas, including chalking out a comprehensive telecom development plan for the North-East, as well as setting up of mobile towers in States affected by unrest at a total estimated cost of Rs 3,567.5 crore.

India: Towerco lease rate rationalisation begins

Indian tower providers Indus Towers and Bharti Infratel have begun rationalising the rates they charge, so that all cellcos will pay the same rate at each location, and have frozen the annual rent escalation for some tenants in many areas. At the same time the fees paid by Idea Cellular will continue to rise until the rates paid by each cellco reach parity. Indus Towers is jointly owned by Idea, Airtel and Vodafone India, whilst Infratel is owned by Airtel.

India: Rumours continue about prospective Tower Vision India acquisition

Various companies are rumoured to be looking into acquiring Tower Vision India, a company based in Gurgaon and has about 8,400 towers and an annual turnover of about Rs. 1,000 crore.

India: Videocon given respite over towerco debts

The Delhi high court ruled that Videocon Telecommunications Ltd should not be made to deposit Rs.450 crore to tower infrastructure companies until a final order is passed. The direction stayed a series of orders passed by a single judge seeking immediate payment by Videocon for having used tower infrastructure facilities. Videocon had to close down its mobile services operations after incurring losses between 2012 and 2015. To meet its liabilities, the company entered into a spectrum sale agreement with Bharti Airtel.

India: Brookfield set to bid for Rcom’s Towers

With the conclusion of Tilman Global Holdings exclusive negotiations to acquire RTIL, US private equity firm Brookfield Asset Management has now emerged as a prospective bidder. Rcom’s sale of Reliance Infratel, their tower business, has been drawn out since January 2015 due to disparities of valuation. Any prospective deal with Brookfield is likely to take place after the planned merger between Rcom and Aircel. Brookfield is one of the world’s largest infrastructure investors and has a substantial stake in TDF, the largest towerco in France.

India: Towercos may miss out on Rs 2,000 crore savings if petroleum products remain outside of GST regime

Telecom tower companies could miss out on a Rs 2,000 crore+ per year savings opportunity on their annual diesel bills if petroleum products remain outside the framework of India’s reformed goods and services tax (GST) regime. The telecom sector is the second-biggest buyer of diesel after the railways and towercos stand to miss out on input tax credits upwards of Rs 2,000 crore (US$340mn) on their annual diesel bills alone. Industry experts estimate the telecom sector spends roughly Rs 9,000 crore a year to consume over 200 crore litres of diesel.

Indonesia: Decrease in tower demand to improve towerco credit profiles

Fitch Ratings predicted that Indonesian telecom tower companies’ credit profiles will benefit as they reduce capex due to the expected slowdown in tower demand this year. In 2016, lower capex is expected to improve the pre-dividend free cash flows of the three largest independent Indonesian tower companies to around US$60-70mn in aggregate. The forecast assumes tower construction of below 2,000 towers among the three largest Indonesian independent tower operators, after peaking at around 3,000 in 2014.

Indonesia: Balitower reports 178.8% profit increase and plans to build 2,000 towers

Bali Towerindo Sentra (Balitower) has reported a 178.8% YOY increase in net profit for the first quarter of 2016. The tower firm booked revenue of IDR57.25bn (US$4.29mn), compared to IDR35.85bn a year earlier, whilst operating profit grew 65.7% YOY to IDR31.01 billion.The company has budgeted capex of around IDR400bn for the year, and aims to install at least 2,000 sites. To that end, Balitower recently secured a IDR95bn loan from Bank Sinarmas, IDR75bn of which will finance the rollout of microcell poles across Indonesia, and particularly in the Greater Jakarta area.

Indonesia: IBS announces plans for organic and inorganic growth

PT Inti Bangun Sejahtera Tbk (IBST) has ambitious plans to build or acquire 1,554 towers throughout 2016 to add to its existing portfolio of 4,192 towers. The company has preset aside capex amounting to Rp875bn (US$66.67mn) for new tower builds. A large number of the new towers will be built in Java, with some also being deployed in Sumatra, Kalimantan and Sulawesi. 10% of the funds will also be allocated to the acquisition of towers.

Malaysia: Sacofa signs an agreement with U Mobile

U Mobile has signed an agreement with Sacofa, the State-backed tower company with exclusive rights to construct, own and manage communication infrastructure in Sarawak, to help its expansion plans in the state. With the partnership, U Mobile will be able to leverage Sacofa’s telecoms infrastructure footprint of more than 700 sites statewide as well as its bandwidth leasing service. Sacofa will deliver built-to-suit sites and provide bandwidth leasing services to U Mobile over a period of ten years.

Malaysia: edotco launches new mobility solution in Cyberjaya

With a vision of building a nationwide high quality, high speed mobile infrastructure, edotco has launched its mobility solution in Cyberjaya, with a broader vision to establish high quality shared telecoms infrastructure nationwide. The solution integrates the benefits of fibre, common antenna and towers, which offer substantial benefits to network operators. Read more about edotco’s Cyberjaya project in an exclusive interview with COO Oliver Coughlan later in this Journal.

Malaysia: edotco announces plans for tower builds across its footprint

edotco aims to build 2,000 towers across Malaysia, Sri Lanka, Bangladesh, Cambodia, Pakistan and Myanmar this year. Last year, and prior to edotco’s entry into Myanmar, a total of 1,700 structures were built. Out of this, 250 were built in Malaysia. This year, edotco aims to build up to 2,000 structures across the six countries where it operates, with 200 to 300 structures to be built in Malaysia.

Malaysia: Deutsche Bank to organise loan for edotco Investments

Borrower edotco Investments (Labuan) has chosen Deutsche Bank to arrange a US$100mn loan to fund new projects. edotco Investments is a subsidiary of the edotco Group, which is in turn a subsidiary of the Axiata Group.

Myanmar: IFC plans to invest in Irrawaddy Green Towers

The World Bank’s International Finance Corporation is considering investing up to US$60mn in Myanmar infrastructure firm Irrawaddy Green Towers (IGT). The investment would consist of two injections of up to US$30mn equity and debt, whilst a further US$30mn would be made available in senior debt financing. IGT has installed more than 2,400 towers in Myanmar to date and aims to roll out a total of 5,000 by the end of 2018, with the project expected to cost around US$490mn. There’s an update on Myanmar’s tower rollout later in this Journal.

Myanmar: OPIC to make first investment of US$250mn in Myanmar

Apollo Towers Myanmar has started to draw down the US$250mn investment in the business provided by he Overseas Private Investment Corporation (OPIC). Apollo has erected about 1,800 telecoms towers, and has plans to install another 2,000. The deal represents the largest U.S. investment in Myanmar to date.

Myanmar: OCK receives loan to fund Telenor tower build

OCK Group, which in December signed a deal with Telenor Myanmar to build 920 towers, has received a syndicated term loan of up to US$40.2mn (RM163.9mn) for the project. Subsidiary OCK Yangon Pte Ltd signed the agreement in Yangon with four Myanmar incorporated banks: OCBC Bank Yangon branch, Malayan Banking Bhd Yangon branch, United Overseas Bank Ltd Yangon branch and Bangkok Bank Public Co Ltd Yangon branch.

Myanmar: OCK orders 80 Flexenclosure eSites for Telenor contract

New Myanmar towerco OCK has ordered 80 fully integrated eSite systems from Flexenclosure. The systems have integrated batteries and gensets and will be manufactured, delivered, installed and finally commissioned by Flexenclsoure. With more than 1,200 eSites installed across Myanmar’s ~10,750 towers, eSite represents the gold standard in hybrid energy technology. OCK recently secured a contract to build 920 sites for Telenor Myanmar.

Pakistan: Mobilink and Warid merger completed

The parent companies of Mobilink and Warid Telecom have completed a deal that will enable them to merge the two companies to form Pakistan’s largest mobile operator. VimpelCom-owned Mobilink entered into an agreement in November to acquire 100% of Warid’s shares. In return the Dhabi Group shareholders have acquired 15% of the shares of Mobilink.

Pakistan: Exclusive negotiations to sell combined Mobilink+Warid portfolio

An unnamed towerco is believed to be in exclusive negotiations for the newly combined tower portfolios of Mobilink and Warid which, after decommissioning overlapping sites, consist of around 13,000 sites. The towercos currently active in active in Pakistan include edotco, Towershare and AWAL Telecom. VimpelCom is rumoured to be seeking close to US$1bn for the tower assets. For more on the prospective transaction in Pakistan, see our case study later in this Journal.

Pakistan: Mobilink signs deal with AWAL to expand rural network

Mobilink has signed a multi-year rollout deal with domestic tower infrastructure company AWAL Telecom. The deal will leverage AWAL’s build-to-suit model, allowing the operator to reduce opex and capex.

Pakistan: Telenor Pakistan and CMPak (Zong) begin RANsharing trials

Having secured permission from the regulator, Telenor Pakistan and CMPak (Zong) have started to trial RANsharing. Telenor Pakistan is the second largest player in the market with a 29% share, and Zong is the number three operator with a market share of 19%

The Philippines: PLDT and Globe Telecom consult with regulator on asset buyout

The Philippines’ largest operators PLDT and Globe Telecom called on the country’s antitrust watchdog to shed light on any issues it may have regarding the joint buyout of San Miguel Corp’s telecoms assets and asked for a meeting to identify issues. The two operators, which together have a 99% market share of mobile connections, have already rolled out cell sites using newly-acquired 700MHz frequency.

Vietnam: OCK Group agrees to acquire 1,938 towers from SEATH

OCK Group signed an agreement with Vietnam Infrastructure Ltd (VNI) for the proposed acquisition of Southeast Asia Telecommunications Holdings Pte Ltd (SEATH). The deal, made through the group’s 60% owned subsidiary OCK Vietnam Towers Pte Ltd involves the acquisition of 42.04mn oordinary shares of SEATH, or its entire equity interest, for US$50mn in cash. SEATH is the largest independent tower owner in Vietnam, with 1,938 telecommunications towers, geographically dispersed throughout Vietnam

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