Asia set for more tower consolidation

A pair of towers deals in Asia will together bring in well over US$1 billion, it seems.

CVC Capital Partners late last week picked up 4,000 towers in Myanmar via the purchase of a passive infrastructure specialist there, while Omantel has reportedly attracted a trio of bidders for the latter stages of its own towers sale. The valuations on both deals are speculative at present, but both look like pretty big money.

Irrawaddy Towers Asset Holding’s shareholders, which include Blu Stone Management and M1 Group, announced the sale of the company to CVC on Friday without disclosing financial information. However, unnamed sources quoted by Reuters said the transaction came in at around $700 million.

The company owns Irrawaddy Green Towers Limited (IGT), an independent infrastructure company that says it counts all of Myanmar’s mobile operators as customers.

Given the rapid and ongoing growth of mobile services in Myanmar, this is clearly a case of shareholders picking their moment to cash in on their investment. There is doubtless a lot of potential here for CVC.

“Our shareholders’ early capital commitment, the support of the relevant ministries and regulators, the partnership with all the mobile operators, and the engagement with local communities have been vital for success; it has facilitated the business growth to the current leading position,” said Irrawaddy Towers chairman Georges Makhoul, in a statement. “With CVC as a future shareholder, the company is poised for further growth and success for the benefit of the people of Myanmar,” he added.

CVC has extensive experience in the TMT space, but according to Reuters the deal constitutes its first entry into Myanmar.

In a separate story, the newswire listed a number of other experienced telecoms players as possible buyers of Omantel’s tower assets. The Omani incumbent is expected to respond to second-round bids from three parties on Thursday, its sources said.

The bidders reportedly comprise a partnership between Omani infrastructure fund Rakiza and IHS Towers; Oman Towers, a specialist passive infrastructure operator in the country; and Helios Towers. The deal will include around 3,000 towers and could be worth over $500 million, Reuters said.

In divesting the towers, Omantel is merely following in the footsteps of myriad telecoms operators in the Middle East and further afield who have taken the opportunity to monetise a non-core asset at a time when the price is buoyant. Investors have been attracted to the solid returns of telecoms infrastructure for some years now, giving telcos an obvious money-raising route out of that segment of the market. The network densification requirements associated with 5G means that there is significant growth potential in the towers space for those who choose to play there.