Phoenix Tower buys 1,300 mobile sites from Liberty Latin America

Telecoms infrastructure firm Phoenix Tower International (PTI) entered into an agreement to buy 1,300 mobile sites upfront from Liberty Latin America in Panama, Jamaica, the Bahamas, Puerto Rico, Barbados and the British Virgin Islands.

The companies also announced the joint deployment of 500 new sites across the region in the next five years as part of their agreement. Total proceeds for the deal amount to US$407mn.

“We are not looking to any other infrastructure to monetize at this point,” CEO Balan Nair told investors in an earnings call.

LLA plans to use the resources for cost-cutting and for investments, including future 5G deployment across the Caribbean and Latin America. 

A partial divestment of the company in the infrastructure part was expected by the market. But while the company remains opportunistic, no new transactions are expected for now, according to Nair.

The tranche of 1,300 towers is part of infrastructure the company categorized as strategic for monetization, said the CEO.

The closing of the transaction is subject to customary conditions and regulatory nods, and is expected to occur within three to six months.

After that, LLA will continue to use the infrastructure owned by PTI in a sale-and-leaseback arrangement format.

In 2022, Phoenix Tower closed a sale-and-leaseback deal for up to 3,800 sites in Chile with WOM, in a deal worth US$930mn. With that deal, PTI reportedly became the largest player in the Chilean market.

INVESTMENTS

Liberty Latin America’s capital expenditures were US$423mn year-to-September, down from US$494mn in the year-ago period.

Property and equipment acquisitions reached US$524mn, down 11% year-over-year, the bulk of which allocated to the Puerto Rican business.

Overall, the company registered an 8% year-over-year revenue decline in both Q3 and year-to-September, to US$1.13bn and US$3.35bn, respectively. 

The decline was mainly attributed to a US$451mn impact related to VTR's deconsolidation, following the merger process of Claro and VTR in October 2022, as well as to organic declines at Liberty Puerto Rico.

The biggest individual operation in Q3 was C&W Caribbean, accounting for US$360mn of the company’s sales. 

Revenue highlights were Liberty Costa Rica and C&W Panamá, both up by 23% and 10%, followed by the Liberty Networks infrastructure and wholesale unit, with 9%. 

With the latter, Liberty Latin America celebrated the cash-in from a wholesale contract with a “significant customer” as a revenue growth driver in the quarter.

In October, Venezuelan telecoms operator VNET Telecomunicaciones signed an agreement with Liberty Networks to use the Arcos-1 submarine system and enhance its fiber network connectivity.

Looking ahead, Nair said that the company remains focused on the integration of businesses in Panama and Puerto Rico. These integration activities are expected to conclude in April, according to Nair.

In Panama, 99% of Claro Panamá’s integration is completed, he said. In Puerto Rico and the US Virgin Islands, the process with AT&T is delayed. 

LLA also reached an agreement to buy Dish Networks’ spectrum and customer base in Puerto Rico and the US Virgin Islands for US$256mn.