Phil-Tower Consortium (PhilTower) and Miescor Infrastructure Development Corporation (MIDC) are forming a joint venture to meet the growing demand for 4G and 5G mobile network infrastructure across the Philippines.
In 2022, at the height of the telecom tower sales frenzy across Asia-Pacific, the two independent tower companies bought the tower assets of local mobile operator Globe Telecom in a sale and leaseback agreement. PhilTower entered a 20 billion Philippine peso (US$357.36 million) transaction for Globe's 1,350 towers, while MIDC agreed to fork out PHP26 billion for ($464.57 million) the operator's 2,180 towers.
"The [joint venture] will provide improved coverage for its mobile network operator clients and continue to drive investment in digital infrastructure in the Philippines," said Meralco, MIDC's parent company, in a stock exchange filing on Wednesday.
The joint venture company will have Philippine-wide coverage and is well placed to support the growing connectivity needs of the country.
"PhilTower and MIDC are both fast growing independent tower companies in the Philippines and this combination would enable them to maximize their complementary geographic footprints to provide better connectivity for their customers," Meralco added.
Currently, PhilTower operates over 1,250 towers located in the three main regions of Luzon, Visayas and Mindanao in the Philippines, and MIDC operates over 1,250 towers primarily in Luzon.
Both companies said the announcement follows a year of significant growth in the Philippine information and communications technology sector, with investment approvals exceeding $1.7 billion (PHP96.16 billion).
The partnership between PhilTower and MIDC is subject to regulatory review by the Philippines Securities and Exchange Commission and the Philippine Competition Commission.
Globe hands over another 100 towers
Meanwhile, Globe Telecom on Thursday said in a stock exchange disclosure that it has closed the sale of another 100 telecom towers to PhilTower for PHP1.5 billion ($26.80 million).
The latest transaction is part of a sale and leaseback agreement signed with PhilTower in September 2022, involving 1,350 towers and other related passive infrastructure for around PHP20 billion ($357.36 million) in total.
The sale and leaseback of tower assets are in line with the Philippine government's tower-sharing initiative, which enables operators to expand their area of coverage without building additional infrastructure.
Local media outlet Philippine Daily Inquirer cited a 2022 study saying the country's telco operators could save up to $1.15 billion in capital and operational expenditures until 2025 through tower-sharing.
The study was made by independent tower company Edotco Group in collaboration with management consultancy firm Roland Berger.
The study calculated that an individual tower site, depending on the size, location and height, could cost between $75,000 and $100,000 while spending for equipment might amount to $15,000-$40,000. Operation expenses, meanwhile, are seen ranging from $9,000 to $11,000 annually per tower.