PLDT of the Philippines has entered an agreement to sell 5,907 of its telecommunications towers to Malaysia’s Edotco and EdgePoint. This represents about half of its mobile towers in the Philippines and the deal is valued at PHP 77 billion (about RM6.27 billion). The sale by PLDT units Smart Communications (Smart) and Digitel Mobile Philippines Inc (DMPI) is described as the largest purchase of Philippine assets by foreign investors.
Under the arrangement, Edotco Group will acquire 2,973 towers and related passive assets while EdgePoint will get 2,934 towers. The deal also includes a leaseback agreement where Smart and DMPI will lease the towers back for 10 years as the main tenant with transactions to be finalised by Q4 2022.
PLDT will still own the antennas, remote radios, microwave dishes and fibre backhaul at the sites. Meanwhile, the two infrastructure companies will own the steel structures, cooling systems, power supply and land lease contracts.
According to PLDT’s Chief Financial Officer Anabelle Chua, proceeds of the sale will be used to settle PLDT’s PHP 27.5 billion (about RM2.2 billion) debt and pay PHP 9 billion (about RM732 million) of special dividends. The deal would also save PLDT from taking on an additional PHP 24.5 billion (about RM2 billion) of debt which will improve its cash position.
As part of the agreement, Edotco and EdgePoint will build 1,500 new towers and two-thirds of it are expected to be ready by 2025.
The Philippines is reported to lag behind other big Southeast Asian countries when it comes to tower density and the government has been pushing for tower-sharing agreements to improve coverage and cut expansion costs. The US trade administration recently stated that the country has only 22,405 combined cell towers operated by three major telcos which include China Telecom-backed Dito Telecommunity which launched services in 2021. Incumbent players such as Globe and Smart currently have a combined 3,669 5G sites nationwide as of January this year.
To recap, Edotco is a regional telecommunications infrastructure company under the Axiata Group which manages over 54,000 towers across 9 Asian countries including Malaysia, the Philippines, Indonesia, Myanmar, Bangladesh, Cambodia, Laos, Sri Lanka and Pakistan.
Meanwhile, EdgePoint is an ASEAN-based infrastructure company backed by DigitalBridge Investment Management that currently owns around 10,000 mobile towers in Indonesia and Malaysia. The deal marks EdgePoint’s entry into the Philippine market and it will be managed by EdgePoint Philippines, a joint venture between EdgePoint, SMS Global Technologies Inc and ComWorks Inc.
