Globe rings up P1.56B from towers sale

MANILA, Philippines — Globe Telecom Inc. received a total of P1.56 billion from the latest turnover of tower assets to Frontier Tower Associates Philippines and Inc. and Unity Digital Infrastructure under their sale and lease back deals, injecting additional financing for its capital expenditures.

On Tuesday, the Ayala-led company announced that 91 towers were transferred to Frontier Towers for P1.16 billion.

These assets were part of the 3,529 towers sold to Frontier Towers for P45 billion in August 2022. About 65 percent of the assets were already turned over to date.

Meanwhile, Globe received P396 million after transferring 33 towers to Unity.

The telco giant and the Aboitiz-backed company entered into a tower sale and lease back deal for 447 towers worth P5.4 billion in May 2023. Some 63 percent of the tower assets are already in the hands of Unity.

READ: Globe Telecom sells 5,709 towers for P71B

“There will be multiple closing dates which will happen as and when closing conditions are met,” the telco said. “We will continue to provide updates on the relevant development of the disposal of tower assets in due course.”

Globe also cashed in P1.85 billion after receiving proceeds from its tower sale to Miescor Infrastructure Development Corp.

In total, the Ayala-led company sold 7,506 tower assets to several tower companies for P96.4 billion.

Towers sale and lease-back deals

The sale and lease back of tower assets are in line with the government’s tower-sharing initiative, which seeks to beef up connectivity across the country.

Tower-sharing enables operators to expand footprint across the country without putting up more facilities, which can also be cost-effective for them. Instead, operators will lease the towers from the independent tower companies that allow multiple users at a time.

Liquidating the assets allows Globe to raise funds for capital expenditures and improve balance sheet health while leveraging the expertise of tower companies.

READ: Globe income tumbles 29% despite record-high revenue

This year, the telco giant has set its capital expenditure guidance at $1 billion, which will be funded via internal cash flow, proceeds from tower sales and debts. By 2025, Globe targets to cut down spending to below $1 billion.

In the past year, the Ayala-led company spent P70.6 billion to build 1,217 new cell sites. It also upgraded nearly 7,000 mobile sites and installed 894 new 5G sites across the country.