edotco Group, a regional tower company in Asia and 63%-owned subsidiary of Axiata Group, today announced that it will acquire 100% of the shares of Touch Group’s wholly-owned subsidiary, Touch Mindscape, which owns 1.0k towers and fiber infrastructure in Malaysia, for a total purchase consideration of $400m USD (1.7bn Malaysian ringgit). Touch Group’s shareholders are Shahzan House (50%), Regal Mountain (25%), TDM Resources (15%), and Best Eight Production (10%).

Finally, the transaction is expected to close by December 31, 2021.

Touch Mindscape – Towers and Fiber in Malaysia

Touch Mindscape constructs and leases telecommunication towers to wireless carriers in Malaysia. Additionally, the company engages in dark fiber leasing and C-RAN services, a base transceiver station (BTS) hotel solution for fiber fronthauling.

As of September 2021, Touch Mindscape’s portfolio comprises 923 ground-based towers and rooftop sites. Also, the company has 19 work-in-progress sites and customer orders for 60 build-to-suit (BTS) towers. Collectively, these assets and construction projects extend Touch Mindscape’s portfolio up to 1.0k tower structures.

Asset Profile

Overall, Touch Mindscape’s towers are 89%+ ground-based structures, rising 115+ feet (35+ meters) in height. Indeed, these physical characteristics make the towers optimal for colocation activity and drive the company’s high tenancy ratio (see below).

Further, the average age profile of the portfolio skews younger, with ~30% of the towers built within the last 5 years.

Geography

Touch Mindscape’s towers primarily span three states in Malaysia, namely Pahang, Negeri Sembilan, and Malacca (Melaka). Additionally, the company’s portfolio includes towers in the cities of Kuala Lumpur and Putrajaya, as well as a few assets in the states of Perak and Kedah.

Tenancy

Touch Mindscape’s towers have a high overall tenancy ratio of 2.6x, equating to ~2.4k tenants with equipment on the company’s existing towers. Further bifurcating this by state, the company’s tenancy ratio is 2.4x in Pahang, 3.6x in Negeri Sembilan, and 3.3x in Malacca (Melaka).

The tower portfolio includes 1.9k+ tenancies from the Tier-I wireless carriers in Malaysia, namely Celcom, Digi, Maxis, and U Mobile. Notably, U Mobile has been named in press reports indicating that it is also exploring the sale of its telecommunication towers.

Fiber

Touch Mindscape owns and operates a 470+ mile (750+ kilometer) optical fiber network, including backbone trunks and last-mile connections, which its leases to customers. The company’s fiber network traverses key routes in Malaysia such as the i) Kuala Lumpur-Karak Highway, ii) East Coast Expressway, and iii) Genting Sempah-Genting Highlands Highway.

Also, most of Touch Mindscape’s tower sites are being fiberized with fiber right-of-way and/or dark fiber arrangements bringing fiber-to-the-tower (FTTT). In turn, the company generates additional revenue from its wireless carrier customers.

Transaction Advisors – edotco Group

edotco Group’s financial advisor was Ernst & Young. Additionally, edotco Group’s legal advisor was Adnan Sundra & Low.

edotco Group – Malaysia Presence Expands

edotco Group operates in eight countries, including Malaysia, Bangladesh, Sri Lanka, Cambodia, Myanmar, Pakistan, Laos, and the Philippines. Collectively, the company’s total portfolio in these countries amounts to 42.2k owned and managed towers.

edotco Tower Company Portfolio Map

edotco Malaysia

As of Q3 2021, edotco has a portfolio of 15.7k towers and managed sites in Malaysia. Specifically, the company has 4.7k owned towers and 10.9k managed sites, primarily for wireless carrier Celcom (owned by Axiata). Additionally, edotco’s owned towers have a tenancy ratio of 1.99x, equating to 9.4k tenants with equipment on its owned towers.

Upon completion of its acquisition of Touch Mindscape, edotco Group will grow its owned portfolio to 5.7k towers in Malaysia. In turn, the transaction will increase edotco’s owned tower market share from 21% to 25% in Malaysia. As a reference point, edotco estimates that there are presently 23.0k tower structures in Malaysia.

Malaysia’s tower market consists of a mix of wireless carrier-owned captive towers and independent tower companies. Wireless carriers hold 53% tower market share, while independent tower companies control the remaining 47% tower market share. Finally, Malaysia’s tower count has grown between 5% to 5.5% compound annual growth rate (CAGR) over the past 4 years.

Adam Simmons covers Towers for Dgtl Infra, including American Tower (NYSE: AMT), Crown Castle (NYSE: CCI), SBA Communications (NASDAQ: SBAC), Cellnex Telecom (BME: CLNX), Vantage Towers (ETR: VTWR), IHS Holding (NYSE: IHS), and many more. Within Towers, Adam focuses on the sub-sectors of ground-based cell towers, rooftop sites, broadcast / radio towers, and 5G.

LEAVE A REPLY

Please enter your comment!
Please enter your name here