PLDT Inc. yesterday signed a deal with two foreign firms for the sale of its thousands of telecom towers for P77 billion.
Out of 15 foreign and local firms that submitted bids last November, the subsidiaries of foreign firms edotco Group and EdgePoint won the bidding for PLDT’s 5,907 telecom towers and related passive telecom infrastructure.
The transaction involves the sale of 2,934 towers located in Luzon to Comworks Infratech Corp., a subsidiary of EdgePoint, for P35 billion and another 2,973 towers located in Luzon, Visayas and Mindanao to ISOC edotco Towers Inc. for P42 billion.
Anabel Chua, PLDT chief financial officer, said in a virtual press briefing the towers were priced at P13 million each and the proceeds from the transaction will be used for debt prepayment, funding of major cash requirement this year and issuance of special dividends of up to P9 billion.
Concurrent with the execution of the sale and purchase agreements, PLDT mobile unit Smart Communications Inc. has also entered into master services agreements with the tower companies whereby Smart has agreed to lease back the towers sold in the transaction for 10 years.
In addition to space, the tower companies will also be responsible for providing operations and maintenance services as well as power to the sites.
Smart has secured competitive terms as the anchor tenant on the towers and expects to benefit from operational and capital expenditure savings.
The sale and leaseback will be complemented by a commitment to build 1,500 new towers in total over the next few years. PLDT said this arrangement will further solidify Smart’s superior network quality and enhance the best customer experience in the Philippines.
Chua said PLDT will spend roughly P7 billion per year for co-location of the towers in the next 10 years, and also accumulate savings estimated at P2.6 billion per year.
In addition to resulting in a significant gain on disposal for PLDT, the arrangement is also expected to be earnings-accretive from the first full year post closing, the telco 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 Manuel Pangilinan, PLDT chairman.
Upon completion of the transaction, the winning bidders will become the largest common tower operators in the country.
PLDT said the closing of the transaction will be staggered based on the number of towers being transferred, with the first closing expected this May and the last closing by fourth quarter of 2022.
Meanwhile, the Department of Information and Communications Technology (DICT) welcomed the deal.
“These tower companies are backed by international groups with extensive experience in the telecom tower space in the region and their entry in the Philippine market significantly jumpstarts our common tower industry,” said Emmanuel Rey Caintic, DICT acting secretary.
“This transaction is a triumph of the DICT’s policy promoting the sharing of telecom infrastructure through the establishment and use of common towers by the telecoms companies and internet service providers,” Caintic added.
