Veon’s Banglalink sell 2,000 towers to Summit Towers
VEON owned Banglalink, one of Bangladesh’s four mobile network operators, has agreed to sell 2000 towers to one of Bangladesh’s four licenced towercos, Summit Towers.
As part of what it describes as its new asset-light model, Banglalink will offload approximately a third of its tower portfolio in Bangladesh, for a sum of BDT 11 billion, equivalent to approximately, $100 million.
Summit Towers is a towerco subsidiary of Summit Communications Group, a leading Bangladeshi infrastructure company, that has a large market share in the fibre space, and pre-existing relationships with MNOs.
Since three new towercos were licenced in Bangladesh in 2020, Summit Towers have outpaced AB Hightech (which was acquired by Pinnacle Towers in 2022) and America Tower subsidiary Kirtonkhola Tower in terms of its new build pipeline.
A tower sale of this nature has been anticipated in Bangladesh for a few years, with the aforementioned towercos touted to be the main candidates to acquire sites from an MNO.
The incumbent towerco in the market, Edotco, was expected to be excluded from any sale and leaseback deals on account of its significant scale. Edotco has been in Bangladesh since 2013, and acquired the majority of parent company Axiata’s towers shortly after.
“This strategic deal is a prelude to greater cooperation between Banglalink and Summit, the largest integrated telecommunications infrastructure company in Bangladesh,” said Muhammad Farid Khan, chairman of Summit Communications and Summit Towers.
“With support from VEON, we believe that our collaboration will go beyond the boundaries of Bangladesh into the global arena, setting an example in the region. We look forward to continuing to work together,” Khan continued.
The closing of the transaction is subject to regulatory approvals from the Bangladesh Telecommunication Regulatory Commission. The proceeds from the sale will primarily be used to service Banglalink’s financial commitments, and for generating cost efficiencies whilefreeing up resources for the company’s digital expansion.
““Banglalink has been successfully transforming into a nation-wide digital operator, with internationally recognized high-quality 4G connectivity and leading digital services such as Toffee and MyBL,” said Erik Aas, CEO of Banglalink.
Aas said the partnership with Summit Towers enables the company to focus its resources on digital offerings, bridging the digital divide and providing an outstanding customer experience to the people of Bangladesh.
Since 2021, VEON has defined its value creation strategy around three pillars, one of which is an asset-light business model and value crystallisation of its tower assets.
It supplements this aim with an ambition for sustained growth in its core business through its digital operator strategy; and growth in adjacent markets such as financial services, entertainment, education and healthcare, with high-potential digital products.
Nomura International Plc, Allen Overy LLP and Dr. Kamal Hossain & Associates are acting as financial and legal advisors to Banglalink. Nomura in particular have been busing recently, advising on other sales such as Cellnex’s stake in its Swedish and Danish units to Stonepeak, and Cornerstone’s sale of a minority stake to GLIL Infrastructure.