The telecoms tower market in Latin America continues to offer important growth and investment opportunities, bolstered by the need for further penetration and densification of 4G coverage and the beginning of the roll-out of 5G.
There are increasing demands from service providers for different formats and types of equipment – such as camouflaged antennas, street-level solutions and small cells, as opposed to traditional macro cell sites.
Furthermore, the consolidation of specific tower portfolios, the offloading of towers owned by telcos and the acquisition of smaller players by larger towercos show no signs of slowing down in the foreseeable future.
BNamericas looked at company data and compared performances, and presents details of operations and some investment plans.
The leading player in the segment, American Tower had 48,747 sites (towers or distributed antenna systems) in place across the region by end-June, out of a global count of 222,000 sites.
The company built 1,514 sites globally in Q2, up from 1,040 in the year-ago period. Of the new builds, 63 were in Latin America, down from 184.
Latin America is the second main geography for ATC after the US and Canada. The region accounted for 15.8% of the group’s total revenues in the quarter and 16.3% of property revenues.
Total revenue in the region stood at US$425mn in Q2, up from US$332mn in the same period 2021. Year-to-June, LatAm sales amounted to US$845mn, compared to US$702mn a year earlier.
Of its regional portfolio, 22,839 sites were in Brazil, down 31 during the quarter as an effect of decommissioning.
The rest were in Mexico (10,027, down from 10,132), Colombia (4,982 down from 4,986), Peru (4,379, up from 4,369), Chile (3,875, up from 3,871), Paraguay (1,445, up from 1,444) Costa Rica (697, up from 696), and Argentina (503, up from 500).
ATC’s main clients in the region are Telefónica, with tower contracts in all the above markets except Peru; AT&T (contracts in Argentina, Brazil, Colombia, Mexico); América Móvil (all markets); and Telecom Italia and Oi (Brazil).
“Looking at Brazil specifically, our largest market in the region in terms of site count for revenue, we're seeing the final stages of a consolidation process that has resulted in transfer of network assets in the hands of large multinational operators, with the capabilities and financial firepower to build out enhanced next-generation networks on a nationwide basis,” CEO Tom Bartlett said in the company’s latest earnings call.
“Further, with the 5G auction now complete, our local scale positions American Tower as a strategic partner to our customers as they transform their networks while allowing us to maximize the opportunities provided by consolidation and increased carrier investment obligations.”
In March, Bartlett said the company projected deploying 500 sites across the region this year, up from 600 that had been planned for full-year 2021.
As for new opportunities, American Tower is said to be among the players disputing a new batch of towers from Brazil’s Oi, together with IHS Towers and DigitalBridge’s Highline.
SBA COMMUNICATIONS
The second largest towerco in Latin America, SBA owns or operates 36,297 sites in 16 markets in the US, South America, Central America, Canada, South Africa, the Philippines and Tanzania.
Of the total, 18,902 were outside the US and its territories.
As of June 30, approximately 30% of the group’s total towers, or 10,889, were in Brazil. According to SBA, no other country apart from the US represented more than 5% of the portfolio.
During Q2, SBA built 100 towers globally.
It also purchased 210 sites and one datacenter in Brazil, for US$127mn. BNamericas could not independently confirm from which player SBA bought the assets.
Nonetheless, SBA is under contract to purchase 2,600 sites from Grupo TorreSur in Brazil for US$725mn, an acquisition expected to be completed by the end of the year. It will be SBA’s second acquisition of towers from GTS and is expected to ramp up SBA's portfolio in the country by over 25%, to over 12,500 sites.
The majority of these sites are located in São Paulo state and most are in urban or suburban areas. The sites have 2.1 tenants per tower on average. The company also said it sees opportunities for growth from them, with November’s 5G spectrum in Brazil as the driver.
For the six months ended June 30, 2022 and 2021, site leasing revenue in Brazil was US$139mn and US$114mn, respectively.
“International leasing activity was again led by strong new lease and amendment activity in Brazil, but we also saw significant executions in a number of our other markets, including South Africa and El Salvador,” CEO Jeffrey Stoops said in a Q2 call.
Brazil’s Oi represented 26.1% of SBA’s international site leasing revenues, followed by Telefónica with 14.9%, and América Móvil (13.2%). Its top three clients are US groups T-Mobile, Verizon and Dish.
SBA has also provided services or leased tower space in Latin America to Tigo (Millicom), Digicel and TIM.
The company, however, has grappled with FX headwinds.
“We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in the Brazilian real from the quoted foreign currency exchange rates at June 30, 2022. As of June 30, 2022, the analysis indicated that such an adverse movement would have caused our revenues and operating income to decline by approximately 1.0% and 0.6%, respectively, for the six months ended June 30, 2022,” the company said in a SEC filing.
SBA’s LatAm operations and main offices in the region are in Brazil, Argentina, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Nicaragua, Panama and Peru.
IHS ended June with 39,052 towers in 11 countries, up from 30,207 a year earlier.
According to the company, the number makes it the third largest independent multinational tower group by sites after American Tower and Cellnex, which does not operate in Latin America.
Of its current portfolio, 7,139 sites were in Latin America, up from 4,629 in June 2021. Its second global market after Nigeria, Brazil leads the region with 6,859 sites, while a further 228 were in Colombia and 52 in Peru.
During the second quarter, IHS deployed 74 new sites in Latin America, compared to 161 in 2Q21, and 240 globally. The region accounted for 9% of its global revenues in the period.
The company, however, cut its full-year construction outlook for the region by around 300 sites. It now expects to end 2022 with 400 new sites deployed across the region.
Previously, IHS said it expected to deploy 700 sites in the region, namely in Brazil.
Overall, the group now projects ending the year with around 1,750 new sites worldwide. In 2021, IHS built 1,300 towers.
The revised forecast is attributed to “timing and general market conditions.”
CEO Sam Darwish said the cut was related to customer demand and the supply chain but volume will "catch up through the course of 2023."
In the first quarter of this year the company closed its latest acquisition, adding 2,115 towers from Brazilian GTS’s SP5 portfolio.
The group is also reported to be interested in Oi’s fixed business towers.
The group’s chief regional clients are Brazil’s top four carriers Telefônica, Claro, TIM and Oi; Colombia’s Tigo, Claro and Avantel; and Peru’s Entel and Bitel.
In addition to traditional macro sites, IHS is also focused on distributed antennas systems (DAS) and small cells in markets such as Brazil, although it sees demand for the latter only increasing once 5G networks get more densified.
“In many of our markets, we continue to see 4G penetration rising ahead of the onset of 5G penetration in the future. The combination of low existing penetration, high subscriber growth and strong increase in demand for data services, supports major investment opportunities at every point along the mobile supply chain – from handsets to tower infrastructure,” the company says on its website.
IHS is also a partner of Brazil’s TIM in the neutral fiber JV I-Systems, focused on the leasing of fiber infrastructure for third-party FTTH deployments.
Phoenix Tower International (PTI) became the largest communications tower owner in Chile following its acquisition of 3,800 sites from local operator WOM. The transaction was completed this week for US$930mn.
“[This deal] enables us to strengthen our investment in Chile, particularly expanding 5G coverage from Arica to Punta Arenas over the next several months, as well as expanding coverage into rural areas of the country by delivering upgraded connectivity and contributing to a reduction of the digital gap,” WOM CEO Sebastian Precht said in a release.
Chile is one of the countries with the lowest rates of tower tenancies, with only one in every five towers being used by more than one operator.
Worldwide, PTI owns and operates over 22,000 towers, wireless infrastructure and related sites in 19 countries in the Americas and Europe.
In January, funds managed by Blackstone Infrastructure Partners purchased a 35% stake in the company, beefing up its expansion capabilities.
After that, PTI acquired 3,200 towers from Cellnex in France, 202 towers from Tower Venture Holdings in the US and the 3,800 from WOM in Chile.
Shylesh Moras, PTI’s senior VP of operations, told BNamericas in March that the firm’s built-to-suit (BTS) plan this year targeted around 300 sites, of which 95-99% would be in Latin America.
PTI had around 9,000 sites in Latin America as of March.
Most of these were in Colombia, Ecuador, the Dominican Republic, Mexico and Bolivia. In the last, in particular, the company claims to be the tower market leader in terms of number of sites.
PTI was also looking to offer energy-as-a-service solutions to companies and service providers in certain Latin American markets as part of a diversification of assets that also includes fiber, edge computing and distributed antenna systems (DAS).
Mexican company Telesites reported a portfolio of 20,704 sites generating income as of end-June, an increase of 402 compared to the previous quarter.
These structures encompassed 8,080 sites related to subsidiary Operadora de Sites Mexicanos (Opsimex, 39%), 12,317 to Fibra Sites (59.5%), and 307 to the operations in Costa Rica (1.5%).
In the last 12 months, the portfolio of the company created in 2015 as a result of the spin-off of 11,766 towers from Telcel (a subsidiary of América Móvil in Mexico) grew by 11.2%, or by 2,093 new sites.
Currently, 205 sites are in different stages of construction in Mexico and Costa Rica, according to Telesites.
As for colocations, excluding Telcel and Claro Costa Rica, Opsimex had signed 3,713 individual site and related agreements as of June.
América Móvil’s newest tower spin-off, which groups the remaining towers owned by the company in Latin America, kicked off this month with 29,090 sites in its portfolio, 39% of which are in Brazil.
The towers available for leasing by wireless service providers are also in Argentina, Chile, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Puerto Rico and Uruguay.
Sitios Latam also started construction of towers in Peru, while continuing “to evaluate growth opportunities in the region,” a statement said.
To continue reading, subscribe to BNamericas to get all the information in this article and access to related news items and reports.
The Chilean telco has completed 83% of its deployment plan and currently has 5G coverage in 222 municipalities in the country in the 3.5GHz band.
The aim of the reform is to collect 4.1% of GDP in tax, but analysts warn of the problems of the higher costs for companies and risks to the sustai...
Subscribe to BNamericas and gain access to thousands of project profiles, key contacts and news.
Get critical information about thousands of ICT projects in Latin America: what stages they're in, capex, related companies, contacts and more. Request demo
Get critical information about thousands of ICT companies in Latin America: their projects, contacts, shareholders, related news and more. Request demo
Subscribe to BNamericas to find news reports, information on projects and contact information relating to thousands of companies that drive business in Latin America.
This is your second of 5 pageviews this month.
To unlock the full potential of BNamericas, subscribe now.