Globe in talks for independent cell tower firm

MANILA, Philippines – Ayala-led Globe Telecom Incorporated announced plans to outsource the building of cell towers in a bid to speed up the process.

In a statement on Thursday, February 8, Globe said it has "initiated discussions with independent 3rd parties for the establishment of a tower company to help speed up the build and deployment of cellular towers in the Philippines."

The telco added that it is "looking at divesting all or part of its tower assets to independent tower companies as part of its network expansion and optimization plan."

Globe said the aim is to maximize the value of its assets, and it has yet to decide on whether it will take equity in any prospective new firm.

"We have been allocating over 30% of our total revenues to capital expenditure for the past 5 years and this level will be sustained over a period of time. An independent tower company will be a win-win solution," said Globe chief executive officer Ernest Cu.

The announcement comes after the government announced a new prospective "common tower policy" in January where independent firms would build cell towers which would then be leased to telco operators such as Globe or rival PLDT Incorporated.

The implementing rules for the policy, aimed at leveling the playing field for new entrants into the sector, is expected to be released within the next few weeks.

Open to new telco player

Cu agreed with the assesment that an independent firm would help the government's push for a 3rd telco player, noting that the plan is for the cell towers to be open for lease to both new and existing players.

"This effectively lessens the barriers that a new entrant has to endure because they will not have to spend the capex to build towers and instead focus on rolling out the necessary network equipment," Cu explained.

"This significantly reduces the time needed for a new player to roll out given the 25 permits and up to 8 months required to build one cell tower. Our move is also consistent with our position of being open to more competition in the telecommunications industry," he added.

Tower companies generally look for multiple operators to locate in these towers which reduces the cost for all locators and increases the return for the tower company.

Globe said it would work with the 3rd parties in determining the locations for prospective towers.

But the telco played down expectations that a separate tower company would improve internet connectivity immediately, noting that around 50,000 more towers are needed to optimize network deployment.

Globe itself has around 8,000 towers to date.

"We hope to continue working with the government to reduce the red tape that is currently being encountered in the permitting and right of way process," Cu said.

According to Globe, the Philippines has one of the lowest tower densities in the world, with under 20,000 towers serving a population of more than 100 million people.

In contrast, Vietnam, with a population of 90 million, has 70,000 towers for its telecommunications needs. Both Bangladesh and Pakistan also have more towers than the Philippines with over 30,000 each. – Rappler.com