The towers market in the Philippines is poised to grow considerably in 2021 and beyond, benefitting independent tower companies including American Tower via its subsidiary Transcend Towers Infrastructure, edotco, Pinnacle Towers, and Edgepoint Infrastructure, amongst others.

Towers in the Philippines – Growth Drivers

The Philippines towers market is being propelled by key growth drivers including: i) accelerated deployments from incumbent wireless carriers, ii) a new entrant, and iii) accommodative policy.

Incumbent Wireless Carriers – Globe Telecom and PLDT

The two incumbent wireless carriers in the Philippines, Globe Telecom and PLDT, are each accelerating their tower deployments in 2021.

Globe Telecom

In 2021, Globe Telecom plans to build 2.0k towers in the Philippines. Indeed, this represents a 50%+ increase on the 1.3k new tower sites the company built in 2020.

PLDT (Smart Communications)

During 2021, PLDT intends to build 1.5k towers. Specifically, this figure is at the top-end of the company’s typical tower build-out range of 1.0k to 1.5k towers annually.

Additionally, PLDT has signed agreements with 10 independent tower companies, as part of the Common Towers policy (see below), covering 1.0k towers. For 2021, PLDT’s target is to deploy 90% to 95% of its towers through these independent tower companies.

New Entrant – DITO Telecommunity

In March 2021, DITO Telecommunity, launched commercial services in the Philippines as the third wireless carrier, challenging the long-standing duopoly of Globe Telecom and PLDT. DITO Telecommunity has the financial backing of China Telecom and Dennis Uy, a Chinese-Filipino businessman.

By the end of 2020, DITO Telecommunity had built-out 2.0k+ towers. Moreover, being a new entrant into the Philippines market, the company will continue to deploy towers as it increases its population coverage. Indeed, the company has stated that it has secured funding to build 5.0k+ towers throughout the Philippines.

Accommodative Policy – DICT

The Department of Information and Communications Technology (DICT), a department of the Philippine government, released its Common Towers policy in June 2020. Specifically, this DICT initiative provides guidelines for shared passive telecommunications tower infrastructure.

Overall, DICT has set a target to roll-out an additional 50k towers in the Philippines by 2026. Indeed, this growth is nearly a 3x increase from the country’s current tower count of only 18k sites.

American Tower – Globe Telecom Partnership

American Tower, through its subsidiary Transcend Towers Infrastructure, has partnered with Globe Telecom, the largest wireless carrier in the Philippines to facilitate their tower infrastructure roll-out.

In September 2019, Globe Telecom signed a memorandum of understanding (MoU) with American Tower’s Transcend Towers Infrastructure, to accelerate its deployment of tower infrastructure in the Philippines. Specifically, through the partnership, Transcend Towers would build 150 sites for Globe Telecom in Luzon, the largest and most populous island in the Philippines. As a result, the additional towers would improve the density of Globe Telecom’s sites in Luzon.

Subsequently, in September 2020, Globe Telecom announced plans to deploy 300 macro sites in Luzon. Furthermore, the company stated that it would assign 400 more sites during 2020 to cover Luzon, Visayas, and Mindanao. As part of this announcement, Globe Telecom committed to be the anchor tenant in a build-to-suit agreement with American Tower’s Transcend Towers Infrastructure, for a portion of these sites in the Philippines.

Additional Tower Companies in the Philippines

Partnerships Announced To-Date

Beyond American Tower, Globe Telecom has partnered to deploy towers in the Philippines with a number of independent tower companies. Overall, these Philippines tower companies include ISOC-edotco, Pinnacle Towers, and Aboitiz InfraCapital.

Firstly, ISOC-edotco is a Philippines joint venture between ISOC Infrastructure and edotco, a telecommunications infrastructure services subsidiary of Axiata Group. Secondly, Frontier Tower Associates is a subsidiary of Pinnacle Towers, an independent tower company in the Philippines, which has backing from private equity firm KKR. Thirdly, Aboitiz InfraCapital is the infrastructure arm of the Aboitiz Group, a private holding company of the Filipino Aboitiz family.

Separately, DITO Telecommunity has partnered with Udenna Infrastructure Corp (UIC) to roll-out a portion of its towers in the Philippines. UIC is an affiliated company of DITO Telecommunity, part of Dennis Uy’s Udenna Group.

Potential TowerCo Participants of Scale

Well-funded independent tower companies that could enter or become larger in the Philippines include Edgepoint Infrastructure and IHS Towers.

Edgepoint Infrastructure

Edgepoint Infrastructure, a portfolio company of Digital Colony, could invest in Philippines towers as part of its Southeast Asia expansion. Notably, Edgepoint Infrastructure’s current CEO Suresh Sidhu, was formerly the CEO of edotco Group.

This is significant because, in June 2019, Globe Telecom signed a memorandum of understanding (MoU) with edotco Group, under Suresh Sidhu’s leadership, relating to DICT’s Common Towers initiative in the Philippines. Therefore, a similar framework could be established between Edgepoint Infrastructure and Globe Telecom.

IHS Towers

IHS Towers is a provider of telecommunications infrastructure with a focus on emerging markets. Notably, parent company, IHS Holding, is listed as one of the 23 firms approved through the DICT’s Common Towers program.

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