PLDT agrees USD1.5bn tower sale to edotco, EdgePoint

19 Apr 2022

The Philippines’ largest integrated telco group PLDT announced today that its subsidiaries Smart Communications and Digitel Mobile Philippines have signed agreements to sell 5,907 telecom towers and related passive telecom infrastructure for PHP77 billion (USD1.47 billion) to subsidiaries of edotco Group and EdgePoint, which are respectively part of Malaysia’s Axiata and US-listed DigitalBridge Group. Specifically, 2,973 towers located primarily in Luzon, Visayas and Mindanao will be acquired by ISOC edotco Towers and 2,934 towers located in Luzon by Comworks Infratech (owned by EdgePoint).

Smart has agreed to lease back the towers sold in the transaction for a period of ten years. PLDT’s press release added: ‘In addition to space, the towercos will also be responsible for providing operations and maintenance services as well as power to the sites. Smart has secured competitive terms as the anchor tenant on the towers and expects to benefit from operational and capital expenditure savings. The sale and leaseback will be complemented by a new tower build commitment of 1,500 towers in total over the next few years.’

Upon completion of the transaction, the winning bidders will become the largest common tower operators in the Philippines. edotco Group – majority owned by Axiata – currently manages over 54,000 towers across nine countries in Asia, while EdgePoint owns approximately 10,000 towers across Indonesia and Malaysia with the backing of DigitalBridge, a global digital infrastructure investment firm with over USD45 billion in assets under management.

Closing of the transaction will be staggered based on number of towers being transferred, with the first closing expected in May 2022 and the last closing by Q4 2022. In addition to resulting in a significant gain on disposal for PLDT, the arrangement is also expected to be earnings accretive from the first full year post closing.

Philippines, Axiata, DigitalBridge Group, EdgePoint Infrastructure, edotco, PLDT Inc. (incl. Smart Communications and Sun Cellular)