Spotlight: The LatAm investment plans of leading towercos

The expansion of 4G beyond urban centers, 5G rollouts and new physical solutions for antenna deployment such as street level towers and camouflage sites are the main drivers for telecom tower companies in Latin America this year. .

Many companies are also betting on neutral, independent fiber offerings, especially American Tower, edge computing capabilities, and edge data centers. Overall, good business prospects and revenue growth are expected over the next year.

Headwinds in 2023 include FX and the consolidation of Towercos client telcos. This tends to affect the termination of many tower companies, leading to contract renegotiations.

The financial problems of groups such as Mexico’s Altan Redes have also affected tower orders for some of these companies.

BNamericas spoke with industry insiders, researched company data, and detailed investment plans for four major towercos operating in more than one market.

american tower

Fiber deployments, community centers, strategic tower construction, and ultimately M&A are on the Latin American radar of American Tower (ATC), the world’s leading wireless infrastructure company.

Mexico and Chile, in particular, are pursuing programs to open community digital centers to serve low-income populations in underserved areas with digital and broadband services.

In Mexico, the goal is to set up 40 community digital centers in the next few years.

In addition to fiber and macro sites, the company also offers 92 in-building and outdoor DAS (Distributed Antenna Systems), small cell and Wi-Fi networks, managed rooftops and related infrastructure services in Mexico.

In Brazil, ATC has also invested in expanding its neutral IoT LoRaWAN network to support Industry 4.0 and IoT ecosystem applications, and recently signed a deal with Algar Telecom as part of this effort.

The group also owns 25,000km of wholesale fiber across five Brazilian states, although only the Minas Gerais backbone is effectively operational.

ATC’s Latin American portfolio had 45,558 owned towers at the end of September, of which 20,643 were in Brazil, down from 22,839 at the end of June.

Of the 1,578 sites built worldwide in the third quarter, 68 were in Latin America. In the same quarter last year, there were 202 total new builds in Latin America.

The company had plans to build about 6,500 new sites around the world this year, 500 of them in Latin America. By 2021, there will be a total of 600 new towers in Latin America.

By number of pylons, Brazil is the third largest ATC market after the United States and India.

In Latin America, Brazil followed Mexico (9,627, down from 10,027 in June), Colombia (4,977, down from 4,982), Peru (3,938, down from 4,379), Chile (3,738, down from 3,875) and Paraguay (1,445, unchanged). ) Costa Rica (695, down from 697) and Argentina (495, down from 503).

ATC’s main customer in the region is Telefónica, which has tower contracts in all markets except Peru. AT&T (contracted in Argentina, Brazil, Colombia and Mexico); América Móvil (all markets); and Telecom Italia.

However, as carrier consolidation increases in some markets, particularly Brazil and Mexico, the company expects churn rates to rise in the region over the next 12 to 18 months.

Unlike some of its peers, ATC is not considering investing in the Latin American data center market.

SBA Communications T

SBA Communications, the second largest towerco in Latin America, has invested in a variety of sectors in the region, with a particular eye on opportunities in edge data centers.

As part of that effort, earlier this year SBA acquired a data center in Brazil from local company Matrix.

SBA expects an overall favorable business environment under the new Lula administration in Brazil, the largest market outside the United States, with 12,500 sites.

CEO Jeff Stoops told investors on the third quarter earnings call:

The group owns or operates 36,519 sites in 16 markets across the United States, South America, Central America, Canada, South Africa, the Philippines and Tanzania as of the end of September.

Latin America operations and key offices in the region are located in Brazil, Argentina, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Nicaragua, Panama and Peru.

“International [US-excluded] Churn rates continued to rise in the fourth quarter, primarily due to carrier consolidation and Digicel’s previously announced exit from Panama.

Digicel Panamá requested voluntary liquidation of its concession in early April after authorities approved the acquisition of Cable & Wireless Panamá by Claro (América Móvil). Digicel argued that the move would make competition impossible.

Cancellations are also expected to hit Brazil’s SBA due to its acquisition of Oi’s mobile business. In September, Oi accounted for his 4% of SBA’s international site lease income, down from his 28.4% the year before.

Overall, Telefónica accounted for 18.6% of global, América Móvil 18.8% and TIM 17.2% of SBA’s September international revenues. SBA’s top three clients are US group T-Mobile, AT&T Wireless and Verizon Wireless.

The company is also expected to continue pursuing new acquisitions itself.

In October, we completed the previously announced acquisition of 2,632 locations from Brazil’s Grupo TorreSur (GTS) for approximately US$725 million in cash. The acquired site has his 2.1 tenants per tower.

The company has made 13 acquisitions in Brazil in the last decade.

IHS Towers

One of the newest players in the space, entering Latin America just under three years ago, IHS Towers is investing in macrosites, small cells, wireless infrastructure and fiber.

Overall, Latin America accounted for 18.2% of IHS’s 39,397 active sites and 9,651 tenants at the end of September. This compares with his 4,804 towers and 5,826 tenants in the same period last year.

Tenant refers to the number of customer leases per tower. For example, if one customer leases space in her five towers, that means he has five tenants.

The company’s main customers in Latin America are Claro Colombia, Claro Brasil, Tigo Colombia, Telefônica, TIM and Oi.

The company said Latin America will require over 19,000 new towers and over 42,000 new MNO locations between December 2020 and December 2025.

However, due to “timing and general market conditions,” IHS Towers has twice lowered its forecast for tower construction for the full year, including in Latin America.

We currently plan to open 300 new sites in Latin America by the end of 2022. This number is down from 400 in the previous outlook and 700 in the initial guidance for 2022.

According to the investment, the company is considering neutral fiber networks in Colombia and Peru, in addition to Brazil where it has a neutral fiber network I-Systems in partnership with TIM. These are his three Latin American markets in which the company operates. It also has operations in seven African countries.

IHS claims to be the world’s fourth largest independent tower company by number of sites, behind ATC, Europe-focused Cellnex and SBA.

The group entered Latin America in February 2020 after acquiring São Paulo-based Cell Site Solutions (CSS), which had operations in Brazil, Colombia and Peru.

In 2021, IHS Towers acquired Brazil-focused Skysites Holdings and Centennial Towers, which operates in Brazil and Colombia.

In the first quarter of this year, the company completed its latest M&A, adding 2,115 towers from GTS’ SP5 portfolio in Brazil.

As a result, combined with construction, IHS Towers now owns approximately 7,000 towers in Brazil, 228 in Colombia and 52 in Peru.

Phoenix Tower International

Phoenix Tower International (PTI) has become Chile’s largest telecom tower owner after acquiring 3,800 sites from local operator WOM.

The company also claims to be the tower leader in terms of number of sites in Bolivia.

Alex Tude, Director of Tower Development at PTI, told BNamericas:

However, the exact number of new sites is set low, as only some negotiations usually result in a deal.

PTI owns and operates more than 18,000 towers, wireless infrastructure and associated sites in 20 countries in the Americas and Europe.

The company had about 9,000 sites in Latin America as of March, and, after initially planning nearly 300 new sites, plans to roll out 134 new sites in the region by the end of 2022. .

The region’s main markets are Mexico, Bolivia, Chile, Colombia, the Dominican Republic and Ecuador, with major customers including Telefónica, WOM, Altice, Viva Bolivia and Altán.

Jamaica has also been a very important market for the company over the past two years, Hermes Figueroa, PTI’s sales director for Latin America, told BNamericas.

In addition to the towers, PTI owns approximately 1,400 km of optical fiber in Mexico and provides DAS services in the region.

One of the company’s main bets is micro- or far-edge computing with processing equipment attached to sites and containerized edge data centers located adjacent to towers.

PTI sees an opportunity in this area, especially in Mexico, according to executives.

Founded in October 2013, PTI is privately held and backed by global investors including Blackstone Group.

In January, a fund managed by Blackstone Infrastructure Partners purchased a 35% stake in the company to bolster its expansion capabilities, and in August Phoenix closed a $2 billion stake in a multi-facility deal covering North and South America. Secured US dollars.

Last October, London-based infrastructure investment manager Wren House became a minority shareholder in PTI for an undisclosed amount.

This year the company acquired 3,200 units from France’s Cellnex, 202 from US’s Tower Venture Holdings and 3,800 from Chile’s WOM.

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