PLDT sells 5,907 telecom towers for P77B

·3 min read

PLDT Inc. has announced that its subsidiaries Smart Communications Inc. and Digitel Mobile Philippines Inc. have signed sale and purchase agreements in connection with the sale of 5,907 telecom towers and related passive telecom infrastructure for P77 billion, a landmark transaction that is expected to have far-reaching benefits for all.

This pioneer undertaking supports the Philippine Department of Information and Communications Technology’s goal of improving tower density which will lead to significant efficiencies and improved connectivity across the Philippines, thus benefiting the company.

The winning bidders, a subsidiary of edotco Group and a subsidiary of EdgePoint (TowerCos), are backed by international groups with extensive experience in the telecom tower space. Both groups will bring to bear global best practices and technologies in operating the towers which should translate into better network quality, higher resilience and faster recovery from typhoons and other natural calamities.

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 Inc., a leading global digital infrastructure investment firm with over US$ 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 TowerCos whereby Smart has agreed to lease back the towers sold in the transaction for a period of 10 years.

In addition to space, the TowerCos will also be responsible for providing operations and maintenance services as well as power to the sites. Smart has secured competitive terms as the anchor tenant on the towers and expects to benefit from operational and capital expenditure savings. The sale and leaseback will be complemented by a new tower build commitment of 1,500 towers in total over the next few years. This arrangement will further solidify Smart’s superior network quality and enhance the best customer experience in the Philippines.

The transaction price of P77 billion makes this deal the largest ever acquisition of assets in the Philippines by international investors. The transaction price reflects the attractive business opportunities that the assets will provide to the winning bidders including the leaseback arrangement with Smart, the growth prospects from the towers acquired, as well as the new tower build commitment from Smart. Upon completion of the transaction, the winning bidders will become the largest common tower operators in the country.

In addition to resulting in a significant gain on disposal for PLDT, the arrangement is also expected to be earnings accretive from the first full year post closing.

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 exclusive financial adviser to PLDT and Smart on this transaction. (PR)

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