Globe wants $1.5 billion for towers

Globe Telecom is looking to sell a swathe of its telecoms towers in a deal that could raise as much as US$1.5 billion, it emerged late last week.

The news came from Bloomberg, which cited unnamed sources with knowledge of the matter as saying that the Philippines operator is working with an advisor to gauge interest in the idea before kicking off a formal sale process. As usual, we’re told that deliberations are at an early stage and may not result in a deal.

That caveat notwithstanding, there’s nothing unusual about this rumour. The telco could well ink a deal at the terms suggested, in no small part because major rival PLDT has recently done just that.

Tongues started wagging about a potential PLDT towers deal in nearly April and a couple of weeks later the telco announced a 77 billion pesos (around US$1.44 billion) agreement to sell 5,907 towers and related passive infrastructure to subsidiaries of towers specialist edotco Group and investor EdgePoint.

It’s not difficult, then, to see where Bloomberg got its potential valuation figure from. It claims Globe Telecom is looking to sell off half of its towers portfolio, which it puts the deal at about 6,000. Globe itself reported having 12,194 mobile sites in total at the end of March.

It is worth noting that Globe made a concerted effort back in May to publicise its recent mobile network expansion endeavours. Nothing new there, particularly at a time when telcos globally are falling over themselves to share information on 5G rollouts, while telcos in the Philippines have also faced state pressure to improve network quality in recent years. But it also lands credence to the report that a towers sale could be on the cards. Towers sales have become a much-used tool for telcos looking to raise cash to invest in networks.

Globe Telecom has set itself a target of rolling out 1,700 new cell sites this year, some way ahead of the 1,407 it built in 2021. The first quarter saw it build 234 new sites nationwide, upgrade 2,344 to 4G, and install 380 5G mobile sites.

“The aggressive rollout was enabled by Globe’s capital expenditures of P21 billion for the quarter, representing 24% of its P89 billion full-year capex guidance. About 82% of the amount was for data-related requirements,” Globe said in a statement a few weeks ago. That P21 billion Q1 spend equates to close to $400 million. It certainly seems like a good time to monetise some of that passive infrastructure.

Naturally, there has been no official comment from Globe Telecom on the reported towers sale, but it would be a sensible – and likely – course of action for the telco at this time. And the sums being bandied about look pretty accurate.

PLDT described its towers sale as the largest ever acquisition of assets in the Philippines by international investors, but if Globe Telecom plays its cards right, that could be a short-lived accolade. There will surely be no shortage of interested parties for its assets.

“In addition to the intrinsic value of the towers, the transaction price reflects the attractive business opportunities that the assets will provide to the winning bidders,” PLDT said, when it signed on the dotted line. Those opportunities are still up for grabs.

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