Global tower industry news

TowerXchange's bimonthly industry news roundup

Thursday 16 November 2017

Asia news

India: American Tower seals Idea-Vodafone tower deal

Vodafone and Idea Cellular agreed to sell their tower portfolios to American Tower for a combined value of around US$1.2bn. Idea’s portfolio include 8,886 sites with a tenancy ratio of 1.7 (or 15,418 tenants) while Vodafone’s comprises 10,926 towers with a tenancy ratio of 1.5 (15,846 tenants). However, following the merger around 6,300 co-located tenancies of the two MNOs will become single tenancies over a two-year timeframe, as noted in a statement published by the two operators. The collapse in tenancies won’t entail any exit penalty. The transaction should be completed within H2 2018.

India: Reliance Communications to shut down voice services in December

Reliance Communications plans to shut down its voice services starting on December 1, 2017 as communicated to the Telecom Regulatory Authority of India (TRAI). RCOM won’t shut its 4G mobile data offering as the operator only plans to close down its 2G and 3G networks and to upgrade its CDMA network to LTE.

India: Airtel plans 3G network shutdown by 2021 and transfers fibre unit

Bharti Airtel will close its 3G network by 2021 as it plans to refarm its spectrum in the 2100MHz band for LTE usage. Additionally, Airtel is transferring its fibre-optic unit to its subsidiary Telesonic Network for an approximate value of US$873mn.

India: Vodafone’s CEO on Indus Towers’ stake and Idea’s merger

Vodafone has valued its 42% stake in Indus Towers at US$5bn, as recently reported by Indian news outlet Economic Times. During a recent analyst call, Vittorio Colao, Vodafone’s CEO, reported “quicker-than-expected progress” on the merger with Idea Cellular, which should close by September 2018. Colao added that “competition remains intense” in India but there are signs of positive developments in the Indian market, with consolidation of smaller operators and recent price increases from the new entrant. Jio has raised its prices in October which is good.”

India: Bharti Airtel sells stake in Bharti Infratel

Bharti Airtel sold 83mn shares of Bharti Infratel via Nettle Infrastructure Investments and raised US$510mn. The secondary share sale is being used to reduce the company’s debt. Following the sale, Bharti Airtel and its subsidiaries own 53.51% of Bharti Infratel.


Europe News

UK: Arqiva cancels IPO

UK infrastructure giant Arqiva, owned by a consortium including the Australian investment bank Macquarie and the Canada Pension Plan Investment Board, has most recently cancelled their decision to IPO, following the announcement on 23rd October that they planned a flotation on the London Stock Exchange. See TowerXchange’s analysis for more information

Spain: Cellnex posts strong Q317 results

Cellnex closed Q317 with revenues up 11% and EBITDA up 25%. The number of sites Cellnex operates grew by 29% yoy following a busy year of acquisitions for the European towerco. They showed strong growth with customer ratio per site increasing 4% like-for-like and the rollout of new DAS nodes growing 15% compared to the first three quarters of 2016. Organic growth is due to remain relatively stable with 45% of their 2,000 site decommissioning plan underway and contracted and 91% of their 2,200 new build target already committed. Cellnex have renewed their commitment to growth through acquisition, highlighting Ireland, Belgium, Germany, Portugal, Denmark and Austria as ‘Tier One’ targets for expansion.

Spain, Germany & Americas: KKR secures full 40% of Telxius

Telefonica has announced that private equity firm KKR has increased its 24.8% stake in tower and cable infraco Telxius by 15.2%, exercising the previously agreed call option over 38 million shares of the subsidiary. The sale is expected to close by the end of this year, meaning KKR will hold 40% of Telxius, with Telefonica retaining control. The deal will have no impact on consolidated results as it consists of the sale of a minority interest.


Americas News

Mexico: IFT revokes Zero Rate ban

The Instituto Federal de Telecomunicaciones (IFT) has removed the ban imposed to Telcel back in 2014 with regards to the fees charged to other MNOs for termination services on its network. The initiative was known as Zero Rate and will be replaced by new interconnection rates as of January 2018. In fact, Telcel will pay a fee of US$0.01 per minute to terminate calls on other operators’ networks while its competitors will be charged US$0.002 per minute for calls terminating on its network.

China Telecom in talks with Oi

China Telecom is reportedly partnering with TPG Capital to take over a controlling stake in Brazilian Oi. According to Reuters, China Telecom has offered to build a fibre network that will reach more than 2,000 municipalities across Brazil and provide around US$1.6bn to cover the outstanding regulatory fines.


MEA News

Cameroon: Afrimax closes Vodafone-branded group

Following the revocation of its license in September, Afrimax has closed down its Cameroon operations, which operated under the Vodafone brand. The operator stated that it was no longer commercially viable to run operations in the country where active MNOs include CamTel, MTN, Orange and Nexttel.

Ghana: Millicom and Airtel launch AirtelTigo brand

On Tuesday 14 November it was announced that Millicom and Airtel’s newly merged entity will had been rebranded AirtelTigo. AirtelTigo becomes Ghana’s second largest operator, behind MTN. The company will serve around 10 million subscribers with revenues close to $300 million, it said in a statement.

Nigeria: MTN expects a local listing in H1 2018

In their Q3 earnings call, MTN stated that they expect to list their Nigerian opco on the local stock exchange in the first half of 2018, should market conditions be favourable. The listing is part of MTN’s settlement deal with the Nigerian government after it was fined NGN330 for a failure to disconnect unregistered SIMs.

Nigeria: NCC plans spectrum auctions

The Nigerian Communications Commission is planning spectrum auctions in both the 2.5GHz/2.6GHz and 700MHz bands in order to meet 4G capacity and coverage requirements respectively. The commission added that it will open up and assign other spectrum bands in an open and transparent manner.

Saudi Arabia: Rural broadband project phase I completed ahead of schedule

The first phase of Saudi Arabia’s rural broadband project has been completed ahead of schedule. The project, part of Saudi Arabia’s National Transformation Plan, is designed to bring >10Mb broadband coverage to sparsely populated areas with estimates suggesting that it would require the construction of 3500-4000 new macro-towers before 2020.

South Africa: Government identifies potential Telkom buyers

The South African government has identified potential buyers for its 39.3% sake in Telkom. The sale is part of a move to ensure the country does not exceed its fiscal expenditure as it looks to bail out SOEs South African Airways and the SA Post Office. Earlier this year, Telkom created a new infrastructure unit, Gyro Towers, through which they planned to better monetise their tower portfolio.

 
 



News archive

Thursday 2 November 2017

Asia news

Bangladesh: edotco deploying wind and solar at 500 sites in Bangladesh

Through its “Tower to Power” initiative, edotco Bangladesh distributes excess electricity from its tower sites to the community for free. edotco’s use of renewable energy and green technology has helped to reduce the carbon footprint of its operations by 20%.

China: China Tower Corporation IPO likely delayed to Q1 2018

Originally hoping for a year-end listing on the Hong Kong Stock Exchange, CTC’s IPO process has stalled. With previous GM Liu Aili reassigned to China Mobile in late September (he subsequently resigned and is now at China Telecom), CTC has yet to officially announce its new leadership.

India: Brookfield – Reliance Communications deal stalls

The deal between the investment firm and the telecom giant for the sale of a 51% stake in Reliance Infratel is not going ahead, according to various Indian news outlets. The fall through of the transaction follows the announcement of the failed merger between Reliance Communication and Aircel.

India: American Tower snatches Vodafone-Idea’s towers

American Tower has emerged as the preferred candidate ahead of Brookfield Asset Management and IDFC Project Equity for the acquisition of the Vodafone-Idea 19,812 sites for an estimated US$1bn. Idea’s 8,886 towers have a tenancy ratio of 1.7 with 15,418 tenants and Vodafone’s 10,926 towers a tenancy ratio of 1.5 with 15,846 tenants.

India: Bharti Airtel to take over Tata’s wireless operations

Tata Teleservices announced its intention to exit the wireless market after years of falling subscribers and market share. Bharti Airtel has agreed to a cash-free and debt-free deal, exception made for some of Tata’s unpaid spectrum liabilities. The transaction is still subject to regulatory approval and will entail the takeover of operations in nineteen circles.

India: Idea’s shareholders approve merger

On October 12, Idea Cellular’s shareholders have given the green light to the merger scheme with Vodafone. The two MNOs need to receive the approval of the Department of Telecom which is the final step towards the creation of the largest MNO in India, with over 35% market share and a valuation around US$23bn.

India: BSNL and MTNL to study possible merger

While still in the news for their intentions to monetise their respective tower portfolios, BSNL and MNTL have been quoted by Indian news outlets as considering a possible merger. BSNL has received the green light to carve out its 65,000 sites into a separate entity while MTNL is assessing the divestment of its 10,000 towers.

India: KKR-led consortium eyes Indus Towers and Bharti Infratel

A consortium led by KKR and formed by the Canada Pension Plan Investment Board, the Abu Dhabi Investment Authority and GIC Singapore is considering a US$11bn transaction to acquire Bharti Infratel and Indus Towers. The proposed combined entity would run over 162,000 towers in India and become the second largest towerco in the world behind China Tower Corporation.

India: Reliance Communications to shut down 2G operations

The debt-ridden MNO is planning to shut down its 2G operations before the end of November and will continue to run its 3G and 4G services until they remain profitable, as reported by several Indian news outlets. The move comes after the collapse of the merger with Aircel, a merger planned to save both companies from piling debts and falling market share.

Malaysia: edotco Malaysia partners with Telekom Malaysia to expand LTE services

Telekom Malaysia (TM) will provide backhaul services for the connectivity between mobile operator’s cell sites and their core network at edotco’s identified ground-based tower sites in selected areas. TM and edotco Malaysia will also explore opportunities to provide common infrastructure via Smart Centralised Radio Access Network (Smart CRAN) Services.


Europe News

CIS: VEON pulls tower sales in CIS 

Following the cancellation of their Russian process in May, TowerXchange understands that VEON has also abandoned the sale of their passive assets in Georgia, Armenia, Ukraine and Kazakhstan. It is as yet unknown whether the operator has other plans for the infrastructure in these countries.

Finland

Broadcast towerco, Digita, operates 556 towers in Finland and was acquired from France’s TDF Group by First State Investments in 2012. Digita is believed to be among several European broadcast asset owners looking for a buyer in 2017. Read TowerXchange’s interview with Digita CEO, Juha-Pekka Weckström

Netherlands: Cellnex has acquired Dutch broadcast towerco Alticom for €133mn

With just 30 high-rise sites across the country, the valuation for this portfolio has raised eyebrows, but Cellnex claim the long range assets (with good fibre connectivity) will prove critical in delivering low latency 5G networks, as well as consolidating their position in the Dutch market. Alticom’s customers include all the telecommunication and broadcast operators in the Netherlands, with whom it has contracts ranging from 5 to 10 years. The deal increases Cellnex’s tower count in The Netherlands to 788 and globally to 24,664.

UK: Sale off the table as Arqiva announces IPO 

UK infrastructure giant Arqiva, owned by a consortium including the Australian investment bank Macquarie and the Canada Pension Plan Investment Board, is looking for a valuation of £6bn when they float on the London Stock Exchange in November. Complications surrounding Arqiva’s £3bn debt pile were thought to have made a sale look more appealing, but it’s believed that talks with the last remaining bidder, a consortium led by investor Brookfield, ended last week. Read more

Germany, Spain & CALA: Telefónica finalises first tranche of KKR deal

Telefónica has finalised the transfer of a 24.8% stake in Telxius to U.S. fund KKR for a total value of €790,5mn. The deal follows the announcement made by Telefónica in February regarding the agreement with KKR for the transfer of a stake up to 40% in Telxius (valued at €1.27bn). The remaining 15.2% should be transferred before the end of 2017.


Americas News

Argentina: Tower One invests in Argentine towers

Tower One Wireless has put down to a US$315,000 deposit to acquire fifteen towers in Argentina. The sites are expected to cost a total of approximately US$1.05mn.

Canada: Canadian 3C Information Solutions acquires Advantage Tower

3C Information Solutions Inc., a Canadian system integrator, announced the acquisition of Advantage Tower Ltd, a leading tower construction company based out of Calgary. 3C Information Solutions is a provider of IT solutions for rural and remote locations.

Mexico: Canadian Tower One to acquire Mexican towerco

Tower One Wireless has signed a letter of intent for the acquisition of an undisclosed Mexican tower company. According to Tower One’s press release the deal is for a Mexican-based tower company, which owns, builds and leases cellular towers to the telecom industry in Mexico, includes a master lease agreement with AT&T.

Mexico: American Tower negotiates with Mexican fibre firm

American Tower is eyeing the acquisition of Mexican infrastructure firm KIO Networks for an approximate US$500mn. If finalised, the deal will grant American Tower over 4,300km of fibre-optic cable.


MEA News

Regional: Millicom’s plans to exit Africa advance as Ghana merger completes and sale discussions with Econet Wireless progress

In Ghana, Millicom has completed the merger of its local business with Airtel, whilst the company has entered into advanced discussions with Econet Wireless regarding the sale of its remaining opcos in Tanzania, Rwanda and Chad, with the sale expected to raise close to $1bn. Millicom had previously sold its DRC operations to Orange and has reached an agreement to sell its Senegalese opco to a consortium involving NJJ, Sofiman and Teyliom Group. Millicom has had a challenging time in the African market and with the region’s revenue representing less than 10% of total group revenues, the exit from Africa will enable the operator to focus on its more successful Latin American markets.

Regional: African towerco IPO speculation steps up

It has been reported that Africa’s three largest privately held towercos, Eaton Towers, Helios Towers Africa and IHS Towers have appointed banks to run their respective IPO processes. Whilst the towercos have shied away from confirming such developments, a H1 2018 listing is widely expected, with Eaton Towers being tipped as the first expected to IPO, followed by Helios. Whilst IPOs look like the likely route, a strategic acquisition could represent an alternative exit for the towercos’ investors, with American Tower the most likely acquirer.

MENA: Omantel further increases its stake in Zain Group

Omantel has agreed the purchase a further 12.1% stake in Kuwaiti headquartered Zain Group, taking Omantel’s stake in the operator up to 21.9% The share acquisition puts Omantel as Zain Group’s second largest shareholder, behind the country’s sovereign wealth fund, Kuwait Investment Authority, which has a 24.6% stake.

Oman: Third Omani MNO license to go to a local consortium 

After having received bids from Etisalat, Saudi Telecom Company and Zain, Oman’s Telecom Regulatory Authority has rejected such bids in favour of awarding the the Sultanate’s third mobile license to an as yet unnamed local consortium. The decision is understood to be part of a move to “enhance the role of local investment funds and enable them to contribute to the growth of the national economy.” The new operator will compete with Omantel and Ooredoo in the country.

Nigeria: 9mobile’s lenders appoint Barclays to find new investors; 16 expressions of interest received

The lenders of 9mobile, formerly Etisalat Nigeria, have appointed Barclays to find new investors for the embattled MNO. 16 expressions of interest have reportedly been received for the opco which had 18mn subscribers as the end of June 2017. Parties know to have submitted EOIs include operators MTN, Airtel, Ntel, Africell and Viettel. Further EOIs have been received from Blackstone Private Equity; Bua Group; Morning Side Capital Partners; Teo-ology Holdings; Obot Etiebet & Co; De-elim Services Limited; AB-Bro Limited; Hamilton; and George International Limited. Both Vodacom and Virgin Mobile had been linked with a potential interest in 9mobile earlier in the year, but have not appeared on the recent list of interested parties. Read TowerXchange’s September analysis of the Nigerian tower industry

Saudi Arabia: Announcement regarding Zain tower sale expected imminently

Having reached an agreement earlier in the month to sell their Kuwaiti sites to IHS and Towershare for $165mn, talks are reportedly close to reaching a conclusion between the parties regarding Zain’s 8,000 Saudi Arabian sites. The deal will mark the Middle East’s second tower transaction of scale and add a seventh country to IHS’ growing portfolio. Read TowerXchange’s analysis of Zain’s Kuwaiti tower sale

Tanzania: Vodacom Tanzania sells its stake in Helios Towers Tanzania

Vodacom Tanzania has sold its 24.06% equity stake in Helios Towers Tanzania to HTT’s parent company, Helios Towers Africa. The stake, valued at $85.5mn was acquired during Vodacom’s sale of its tower portfolio to Helios back in 2013. Vodacom had previously sold 100% equity in its 1,149 towers to Helios for $75mn, but as part of the terms of the transaction, acquired a 24.06% stake in the company’s Tanzanian opco. According to Vodacom Tanzania’s Managing Director, Ian Ferrao, the transaction will up capital to further enhance Vodacom’s Tanzania’s balance sheet and strategic operations. Vodacom’s relationship with Helios will be unaffected by the sale. The acquisition of the stake by Helios Towers Africa further simplifies the towercos ownership structure as they head towards a likely IPO in early 2018.


 

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