MANILA - PLDT has signed a deal to sell 5,907 telco towers to two tower companies for P77 billion, the company disclosed on Tuesday.
Smart Communications and Digitel Mobile Philippnes Inc, which are PLDT subsidiaries, signed deals to sell the telco towers and related passive telecom infrastructure, to tower companies edotco and EdgePoint, PLDT said.
PLDT said Smart has secured competitive terms as the anchor tenant on the towers.
“The sale and leaseback will be complemented by a new tower build commitment of 1,500 towers in total over the next few years,” PLDT said.
The edotco Group manages over 54,000 towers across nine countries in Asia, while EdgePoint owns approximately 10,000 towers across Indonesia and Malaysia, PLDT said.
Smart also signed 10-year lease agreements with the towercos that will also be responsible for providing operations and maintenance services as well as power to the sites.
“This transaction presents a highly strategic acquisition for edotco as it diversifies and strengthens our pan-Asian platform with exposure to a nascent, high-growth market with strong governmental support,” said Adlan Tajudin, CEO of edotco Group.
EdgePoint and edotco will also become the largest common tower operators in the country, PLDT added.
“The Philippines telecoms sector has tremendous potential, and we look forward to being part of its future,” said Suresh Sidhu, CEO of EdgePoint.
Compared to its neighbors in Southeast Asia, the Philippines has one of the lowest telco tower-to-subscriber ratios.
The P77 billion is the largest-ever acquisition of assets in the Philippines by international investors, PLDT said.
“We expect to reap benefits in terms of a valuation uplift and capital reallocation with PLDT applying the proceeds to deleverage, further invest in the network, and return cash to shareholders via a special dividend,” said PLDT Chairman Manuel Pangilinan said.
The announced sale price is higher than the earlier valuation of over P50 billion.
This could be “partly on the back of good condition of our towers, partly because of the credit standing of PLDT and partly because we have good financial advisers," Pangilinan said in a press briefing.
PLDT chief financial officer Anabelle Chua said the company could save from lease payments with its co-location discount agreement with tower companies.
On average, PLDT pays P100,000 per site per month to rent towers but a 20 percent discount will be extended once other telcos co-locate from the towers the company previously owned, she said.
Pangilinan also added that part of the proceeds would be used to improve the existing network in the country.
-- with a report from Jessica Fenol, ABS-CBN News