Phil-Tower Consortium, Inc. (PhilTower), and Miescor Infrastructure Development Corporation(MIDC) have teamed up to tackle the increasing demand for infrastructure supporting 4G and 5G networks in the Philippines.
A sale-and-leaseback agreement was signed by the two separate tower companies to acquire the tower assets owned by Globe Telecom, a local mobile operator. PhilTower carried out a transaction worth 20 billion Philippine pesos for Globe’s 1350 towers (equivalent of US$357.36million), while MIDC committed itself to a transaction worth PHP26 billion, which is equivalent to $464.57million for Globe’s 2,180 towers.
Meralco (the parent company of MIDC) filed a statement with the stock market on Wednesday stating that “[the joint venture] aims at increasing coverage for mobile network operators and encouraging continued investment in Philippine digital infrastructure.”
The joint venture is positioned strategically to support the Philippines’ growing connectivity requirements.
Meralco said that “PhilTower, MIDC and other independent tower companies are rapidly expanding in the Philippines. They will be able to use their complementary geographical footprints to provide enhanced connectivity for clients.”
PhilTower is currently responsible for the management of over 1,250 radio towers across Luzon, Visayas (including Mindanao), and Mindanao. MIDC, on the other hand, manages about 1,250 radio towers mostly located in Luzon.
Both companies stated that the announcement came after an impressive year for the Philippine IT sector. The investment approvals exceeded $1.7 Billion (PHP96.16 Billion).
Philippine Securities and Exchange Commission and Philippine Competition Commission are examining the partnership between PhilTower and MIDC.
Globe Telecom announced in a notification to the stock exchange on Thursday that they had sold another 100 towers of telecom equipment to PhilTower, for PHP1.5billion (approximately USD26.80m).
This recent deal is part of the previously signed sale and leaseback contract with PhilTower, which was inked in September 2022. The agreement covers 1,350 towers as well other passive infrastructures valued at PHP20 billion in total (equivalent in value to $357.36 millions).
The sale and leasebacks of tower assets are in line with the Philippine Government’s tower-sharing initiative, which allows operators expand their coverage area without building additional infrastructure.
According to a study from 2022 cited by Philippine Daily Inquirer’s local media, tower-sharing could help telecommunications companies save up to $1.15bn in capital and operation expenditures between 2025 and 2050. According to this study conducted by Edotco Group and management consulting firm Roland Berger in collaboration, individual tower sites may incur costs of $75,000 to $100,000. Equipment expenses might range between $15,000 and $40,000. Additionally, annual operating costs for each tower are expected to be between $9,000-$11,000