US and UK see Colombia’s potential
19 July 2011 |
Telcos on both sides of the Atlantic are looking to buy into the ever expanding Colombian market. US tower company, American Tower, is buying cell towers in the region while UK operator, Virgin Mobile, will become the next MVNO to enter the market.
The Colombian subsidiary of American Tower, ATC Infraco, is set to buy up to 2,126 wireless towers from Colombia Móvil, a subsidiary of Millicom. ATC Infraco is still in the process of being formed and the towers will be bought upon its completion.
ATC Infraco will lease towers back to Colombia Móvil as part of a long term leasing and built-to-suit agreement in an attempt to save substantial capex and opex for Colombia Móvil.
The towers will be sold for $182 million in cash and Millicoms and Colombia Móvils shareholders will have the option to acquire an indirect, substantial minority equity interest in ATC Infraco.
"As our customers in Colombia continue their focus on deploying wireless data networks, we believe our collocation model provides them with significant value through capex savings and time to market advantages, said James Taiclet, chairman, president and CEO of American Tower. As a result, we believe this transaction further enhances our ability to maximise our market opportunity in Colombia."
UK entrepreneur, Richard Branson is also looking to invest in Colombia with his wireless brand, Virgin Mobile. According to the Financial Times, Virgin and Tribe Mobile are investing $300 million over a five year period to deploy a virtual Virgin network in eight countries across Latin America, including Colombia.
Colombia is becoming an attractive market to foreign investors. While 3G penetration remains low in the country, more spectrum licenses are set to be auctioned this year and the economy is expected to grow by 4.5% annually between 2010 and 2020, according to a report from BuddeComm. All this combined with the kind of success seen by billionaire Carlos Slim in the region and it soon becomes clear why so many foreign operators would now choose to enter the market.