PLDT sells towers for $1.5bn while rival Globe seeks partnerships

Mharicar Castillo-Reyes.jpg

Philippines operator PLDT has sold its tower infrastructure for 77 billion pesos (US$1.5 billion), while its rival, Globe, has said it is looking for “strategic partnerships” for its own infrastructure.

PLDT has sold 5,907 towers to subsidiaries of Axiata’s Edotco and Digital Bridge’s EdgePoint, in an almost 50-50 split between the two. The price works out at about $500,000 per tower.

The company said that, on completion of the transaction, the two winning bidders will become the largest common tower operators in the Philippines.

At the same time PLDT’s two mobile operations, Smart and Digitel, have signed 10-year deals to use the towers.

Alfredo Panlilio, president and CEO of both PLDT and Smart, said: “Our towerco partners, selected after a thorough process, will provide the group with the infusion of global best practices and innovative solutions. PLDT is now even better positioned to continue our journey towards service excellence and best-in-class customer experience, making us the telco of choice in the Philippines.”

Both PLDT and Globe are under pressure to cut costs and expand reach because of the arrival in the market of Dito, a company backed by China Telecom.

Globe subsidiary Asticom said at the same time that it is looking at entering into strategic partnerships, joint ventures, and acquisitions to grow and expand its portfolio of businesses.

Mharicar Castillo-Reyes (pictured), Asticom president and CEO, said: “A number of private equities have approached us in the past three months and have raised interest. We’re making sure that we find the right strategic partners that will help us grow the business and add value to the solutions we offer to address the needs of our customers.”

She did not offer details but her colleague Marc Kerveillant, general manager of Asticom’s subsidiary, Fiber Infrastructure and Network Services Inc (Finsi), said they are open to joint ventures and acquisitions.

“We’re in discussion with several companies for joint ventures. Our main goal is to increase our capabilities, grow the business, and eventually, create a connected nation,” he said.

PLDT’s Smart said it has agreed to lease back the towers sold in the transaction for a period of 10 years. The tower companies will also be responsible for providing operations and maintenance services as well as power to the sites.

Smart said it 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.

PLDT said closing of the deals will be staggered based on number of towers being transferred, starting from May 2022 and running to the end of the year.