Oi, Brazil’s fourth largest wireless carrier, which is currently in bankruptcy protection, today announced that it has sold both its tower and data center units.

Oi’s Towers – UPI Torres

Oi sold its UPI Torres unit, to Colony Capital’s Highline do Brasil for 1.06bn Brazilian real ($200m U.S. dollars). Indeed, Highline do Brasil was the only bidder in the auction for Oi’s 637 tower sites. Additionally, as part of the transaction, Highline also is acquiring 222 distributed antenna system (DAS) nodes. These nodes are in locations such as shopping malls, hotels, and other commercial real estate throughout Brazil.

Highline’s acquisition of Oi’s 637 tower sites comes only days after the company acquired Phoenix Tower and its 2.5k tower sites in Brazil. Therefore, following the Oi transaction, Highline will own more than 3.8k tower sites, across its portfolio in Brazil.

Brazil Tower Operators

Overall, Brazil has 64.8k towers, giving Highline, including Oi, a market share of ~6% of the total towers in the country. Indeed, Highline becomes the fifth largest independent tower operator in Brazil with the acquisition of Oi’s towers.

The largest independent owners of towers in Brazil include American Tower (19.1k towers), SBA Communications (9.9k towers), Grupo TorreSur (5.2k towers), and Telxius (3.9k towers). Additionally, the wireless carriers in Brazil own a further ~19k towers, in aggregate.

Oi’s InfraCo

Separately, Highline do Brasil is also keen on acquiring 51% of the InfraCo, which will hold Oi’s fiber assets. The auction for this asset will occur in Q1 2021. However, no preferential bidders have been chosen for the InfraCo, at this time. Specifically, InfraCo consists of Oi’s fiber-to-the-home (FTTH) network and indefeasible rights of use (IRUs) for backbone and backhaul.

Oi’s Data Centers – UPI Data Center

In a separate transaction, Titan Venture Capital, a division of Brazilian private equity firm Piemonte Holding, bought the UPI Data Center unit of Oi for its reserve price of 325m Brazilian real ($61m U.S. dollars). Specifically, Oi’s UPI Data Center unit has five data centers, with locations in the Brazilian cities of Curitiba, Porto Alegre, São Paulo, and Brasília.

Oi’s Debt Restructuring

Oi’s assets were sold through the Brazilian court system under the Judicial Reorganization procedure, which is supervising Oi’s debt restructuring.

Following the sale of Oi’s tower and data center units, Oi’s wireless business will be sold. As Brazil’s fourth largets carrier, Oi has 36.5 million subscribers (16% market share) in its wireless business. In this auction, Brazil’s three largest carriers, Vivo, Claro, and TIM have obtained preferential status. Indeed, they secured this status with a joint bid of 16.5bn Brazilian real ($3.1bn U.S. dollars). Finally, the auction will take place, next month, on December 14th. Management expects the transaction to close in Q4 2021.

Adam Simmons is the Founder & CEO of Dgtl Infra. He started his career with an S&P 500-listed big box retailer, in an operations management role. Adam's entrepreneurial "itch" led him to start a 5G-driven company, focused on innovative retail solutions using augmented reality and shoppable videos, which was eventually sold to an advertising and consulting group. After, realizing the potential of 5G, Adam shifted his efforts towards investing in the "building blocks" of 5G - known as digital infrastructure, completing a number of strategic investments, buying cellular towers, data centers and fiber networks.

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