Telecom giant PLDT announced on Monday, April 19, that its subsidiaries Smart Communications and Digitel Mobile Philippines have signed agreements for the sale of 5,907 telecom towers and related infrastructure for P77 billion.
The transaction price of P77 billion makes the deal the largest ever acquisition of assets in the Philippines by international investors.
The winning bidders, a subsidiary of edotco Group and a subsidiary of EdgePoint. Upon completion of the transaction, the companies will become the largest common tower operators in the country.
edotco Group manages over 54,000 towers across nine countries in Asia and is majority-owned by Axiata Group, a major telecom operator across Asia.
EdgePoint, on the other hand, owns approximately 10,000 towers across Indonesia and Malaysia and is backed by DigitalBridge Group, a global digital infrastructure investment firm with over $45 billion in assets under management.
Of the 5,907 towers being monetized, 2,973 towers located primarily in Luzon, Visayas, and Mindanao will be acquired by ISOC edotco Towers Inc. (subsidiary of edotco Group) and 2,934 towers located in Luzon by Comworks Infratech Corp. (subsidiary of EdgePoint).
Concurrent with the execution of the “Sale and Purchase Agreements”, Smart has also entered into Master Services Agreements with the common tower firms whereby the mobile operator has agreed to lease back the towers sold in the transaction for a period of 10 years.
In addition to space, the tower firms will also be responsible for providing operations and maintenance services as well as power to the sites. The sale and leaseback will be complemented by a new tower build commitment of 1,500 towers in total over the next few years.
Commenting on the transaction, PLDT chairman Manuel V. Pangilinan said: “This partnership with experienced international tower companies represents another milestone in PLDT’s strategic transformation. We expect to reap benefits in terms of a valuation uplift and capital reallocation with PLDT applying the proceeds to deleverage, further invest in the network, and return cash to shareholders via a special dividend.”
DICT acting secretary Emmanuel Rey R. Caintic welcomed the deal. “These tower companies are backed by international groups with extensive experience in the telecom tower space in the region and their entry in the Philippine market significantly jumpstarts our common tower industry. This transaction is a triumph of the DICT’s policy promoting the sharing of telecom infrastructure through the establishment and use of common towers by the telecoms companies and Internet service providers (ISPs),” he said.
Closing of the transaction will be staggered based on number of towers being transferred, with the first closing expected in May 2022 and the last closing by the fourth quarter of 2022.
UBS AG acted as the exclusive financial adviser to PLDT and Smart on this transaction.
