America Movil spins off towers, but likely to keep control

America Movil has become the latest big-name telco to announce a plan to spin off towers with a view to maximising the value of those passive infrastructure assets.

The Mexican giant said it will hive off its towers in the Latin American markets in which it operates  later this year. In each case, the plan will have to comply with regulations in each jurisdiction and will require the approval of various authorities, as well as the go-ahead from America Movil shareholders. Nonetheless, it expects to carry out the reorganisation plan during the course of 2021.

The company runs mobile operations in Argentina, Brazil, Colombia, Chile, Ecuador and Peru, in addition to its domestic operations and those it holds in Central America, the Caribbean, the US – for now – and Eastern Europe. It did not disclose how many towers it has across its Latin American businesses.

“This operation will maximize the infrastructure’s value, as the resulting entities will be independent from AMX, with their own management and personnel, exclusively focused in developing, building and sharing telecommunications towers for wireless services,” the telco said in a brief statement on the matter.

There is no suggestion from America Movil at this point that it is looking for external investors for the new towers businesses.

History suggests it will be keen to keep control of the operations.

America Movil spun out its towers in Mexico in 2015 in response to regulatory pressure designed to curb its dominance in the market. It floated that business on the Mexican Stock Exchange at the end of the year, but various members of the Slim family still hold around 62% of the business, according to Telesite’s most recent annual report.

Telesites is growing steadily. At the end of Q3 last year it had 17,964 towers to its name, the vast majority in Mexico, but also including 304 in Costa Rica. That’s an increase of nearly 5,500 since the end of 2015. In July last year it contributed 6,500 of its towers to a FIBRA, essentially the Mexican equivalent of a REIT, which raised just over 12 billion pesos (around US$600 million) via an IPO. It intends to channel those proceeds into building new towers in Mexico.

When America Movil was preparing for the initial listing of Telesites, there were hints from the company that a similar move at its operations in the rest of Latin America could be an option in future. It looks like it has finally got round to pursuing that option, at a time when telcos need more towers than ever before.