Puerto Rico's QMC Telecom raising 2025 capex on growing demand for indoor 5G

Puerto Rico-based wireless infrastructure group QMC Telecom plans to ramp up its investments in Latin America in 2025, driven by increasing demand for indoor 5G connectivity projects, distributed antenna systems (DAS) and street-level solutions (SLS).

"We intend to invest about 20% more than we invested last year," COO André Machado told BNamericas.

In 2024, QMC had announced a US$60mn investment plan but ended the year with capex of nearly US$70mn. That suggests it will likely invest around US$80mn this year.

With operations in multiple countries across the region, QMC's main markets for indoor 5G solutions in Latin America are currently Brazil and Chile.

In Brazil, QMC reports 15 such projects underway, while in Chile, it has four.

In addition to these two markets, QMC recently signed a contract with Parque Arauco, one of Latin America's leading shopping center operators, to implement and commercialize mobile connectivity solutions at the 22 malls in its Peruvian portfolio.

The agreement grants QMC Telecom exclusive rights to offer its 4G/5G indoor connectivity solutions in those shopping centers.

In Chile, all four contracts are also related to mall connectivity.

The Santiago subway is evaluating the implementation of infrastructure to boost mobile signals, according to Machado, who noted that such a project would likely move forward in one or two years.

In Brazil, QMC's projects are mainly distributed across malls, airports and subway systems.

One of the company's largest mall projects in Brazil is with Allos, a group operating 58 shopping centers in 40 municipalities. QMC reports having implemented indoor connectivity solutions in 36 of those malls.

Taking into account all assets – towers, indoor solutions, DAS and SLS – QMC Telecom closed 2024 with more than 4,200 active sites in Latin America. Approximately 80% of these are in Brazil.

In SLS alone, the company reports 1,000 nodes in operation in Latin America, most of them in Brazil, driven by demand for signal reinforcement using infrastructure that blends with urban furniture such as bus stops, newspaper stands and building façades.

Towers and private networks

There are two segments where QMC does not currently anticipate strong demand for mobile infrastructure: traditional macro towers and private networks.

"The tower business is very interesting, but the indoor and SLS business is growing faster. We continue to make towers on a normal basis but our big growth drivers today are mainly indoor and SLS," said Machado.

Indoor and SLS solutions are particularly active in markets where a first wave of 5G has already been deployed, such as Brazil and Chile, making signal densification necessary.

In private networks, QMC believes project activity has yet to take off as expected. The few underway are mostly being handled directly by mobile operators and radio equipment providers, such as Nokia, Huawei or Ericsson.

Acquisitions

QMC does not rule out new acquisitions of towers or mobile infrastructure companies in Latin America but, according to Machado, the current scenario is not especially favorable for M&As.

Last year, the company acquired 30 towers in Peru from local firm Infratel.

"Today, inorganic growth in Latin America... I don't think it makes sense. It's time for us to have good organic growth in Brazil and, in the rest of Latin America, to understand how the game will play out with the players consolidating," said the executive.

The consolidation Machado refers to is among telcos. This wave will concern major tower operators, as it often leads to higher churn and contract cancellations.

On the other hand, telco consolidation is also seen as somewhat positive, as it can result in a more rational market with greater capacity for infrastructure investment by the remaining players.

According to QMC, a solid and sustainable mobile communications market consists of no more than three large national operators per country.

"Today, we believe a lot in Brazil. Brazil has shown itself to be a thriving market, growing in a more disciplined and balanced way, with three operators," said Machado.

Countries such as Colombia, Peru and Chile currently have around four national incumbent operators and are undergoing intense M&A activity.