América Móvil tops Telefónica as SBA’s biggest LatAm customer

América Móvil topped Telefónica to become the carrier generating most revenues for telecoms infra and tower group SBA Communications outside the US. 

The Mexican group, through its Claro subsidiaries, accounted for 20.9% of SBA’s international site leasing business in 4Q23, compared to Telefónica’s 20.7% share. The figures are in a presentation accompanying SBA’s latest financial and operating report. 

In Q3 last year, the Spanish telco’s share was 22.8% with América Móvil contributing 19.7%. In 4Q22, the shares were 25.9% and 17.7%, respectively. 

Brazil’s TIM was the third non-US carrier client for SBA, accounting for 15.8% of international revenues in 4Q23. 

Completing the list is Oi at 3.8%, whose mobile business and related infrastructure contracts were sold to the Brazilian subsidiaries of América Móvil, Telefónica and Telecom Italia in a deal completed in 2022. 

Oi’s contribution to SBA’s revenue has been falling since 2Q22 onwards due to the sale.

Together with takeovers among other LatAm telcos, the consolidation has impacted SBA’s business with increased churn. SBA's top clients are US carriers T-Mobile, AT&T and Verizon. 

“While domestic carrier activity was at a low level by historical standards during 2023, a significant percentage of our sites still require 5G related upgrades, and with the growing success of products such as fixed wireless access, the demand for improved speeds, lower latency and greater network capacity continues to advance,” Florida-based SBA’s CEO Brendan Cavanagh said in the report. 

“Internationally, we continued to experience strong demand for our towers across many of our markets and have become a trusted partner to our international carrier customers.”  

During Q4, SBA said it acquired 23 communication sites for US$21.3mn and built 138 towers. The company also said it spent US$17.4mn to purchase land and easements and to extend lease terms during the quarter. 

In addition, it purchased or is under contract to purchase 281 sites for a total of US$87.8mn in cash. The company expects those deals to close by the end of the third quarter of 2024. 

As of end-2023, SBA owned or operated 39,618 sites, 17,487 of which were in the US and its territories and 22,131 internationally. 

SBA’s total Q4 revenues of US$675mn were down 1.6% year-over-year. Site leasing revenue was US$636mn, of which US$170mn came from international markets. 

Net income was US$110mn versus US$103mn. In Brazil, the company’s largest international market, same-tower gross organic growth was 8% on a constant currency basis, CFO Marc Montagner told an earnings call. 

Elsewhere in the region, SBA's operations and main offices include Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Nicaragua, Panama and Peru. 

ARGENTINA EXIT

The company on the other hand is exiting Argentina.

“In places where we hold a more significant position, we have tended to do better than those places where we do not. This ultimately means that we need to find a path to increase scale in certain markets or possibly exit a market. An example of this was our fourth quarter exit from Argentina,” said the CEO in the call.

In December, SBA Torres Argentina transferred the control of its local towers to ATIS (Argentina Telecom Infrastructure Solutions). 

The deal was estimated at US$405mn.

“Not only was our market position subscale, but the economic instability in that country created operational challenges that were dilutive to the otherwise typically very attractive attributes of the tower business,” said Cavanagh.

BRAZIL DEAL 

SBA signed an anticipated multi-year agreement with Telefônica Brasil, which operates as Vivo, related to Oi’s sites. 

Under the agreement, closed during Q4, SBA will incur US$4mn wireless consolidation churn in 2024 and an additional US$2mn over the following years.  

SBA had reached a similar agreement with TIM related to Oi's consolidation last year. 

Cavanagh told investors that the TIM deal pulled forward some of SBA’s churn into 2023 associated with that consolidation, “but it dealt with a number of other issues and extended agreements out.”  

SBA still has no agreement with Claro but discussions continue.