EdgePoint Towers Inc. (EdgePoint Philippines) has reiterated its commitment to bring investment, innovations, best practices, and expertise to help address the growing connectivity requirements in the country.
During the inauguration of its new headquarters in Makati City on November 10, the local subsidiary of Singapore-based and regional telecommunications infrastructure firm EdgePoint Infrastructure said it is expanding options for Philippine-based telecommunications service providers in line with the Department of Information and Communications Technology (DICT)’s Policy of Shared Passive Telecommunications Tower Infrastructure (or Common Towers policy).
Since its entry into the market in April 2022, EdgePoint Philippines has entered into a Sale & Leaseback deal with Smart Communications Inc and its subsidiary Digitel Mobile Philippines, Inc. (both owned by telco giant PLDT Inc). Under the agreement, 2,934 towers owned by Smart and Digitel across Luzon will be acquired and leased back by EdgePoint Philippines. So far, 2,232 towers have already been handed over. The rest would be completely turned over by the first half of 2023.
EdgePoint advantages
The transaction is not unique to the Philippines as it has become the standard in the telco industry across the globe. Tower operators like EdgePoint buy existing towers and construct new ones to be leased to telco operators. All the towers purchased from the Smart group are being leased back and could also be rented or shared by competing telco companies at the same time. This spares the telco players from the usually hefty costs of putting up and maintaining cell towers.
“The cost of putting up a new site is not really coming down. In terms of physical infrastructure, steel and cement cost a lot. And maintenance is 90% physical—making sure steel is rust-free. It will not be efficient for telco firms to continue funding these sites,” EdgePoint Infrastructure Founder and CEO Suresh Sidhu explained during an interview with Tech and Lifestyle Journal.
“We pay them cash they can use for new investments. We also provide sharing benefits when we bring a second tenant; we give both tenants a better (lease) price. So companies like PLDT get excited because not only do we pay affront, we also allow them to have lower (operating) costs over time. Thus, they promote sharing and that makes the model a good business strategy,” Sidhu added.
In a recent disclosure, PLDT Group said it has already sold almost half of its over 12,000 telecom towers nationwide. The group is set to generate a total of about ₱77 billion from the sale of 5,907 towers (almost half of which were acquired by EdgePoint). It explained that the move is part of its transformation strategy and is also in line with the government’s Common Tower Policy, which is aimed at increasing cell density or the number of mobile subscribers being served by a tower.
Improving telco services
“In the Philippines, there is an average of 4,090 users per tower, with mobile download speeds of 22.5 Mbps. The Philippines has historically lagged in ASEAN but we are now seeing much-needed policy reforms and new investments for infrastructure, in line with the government’s push to ensure that all Filipinos have access to broadband capability,” said EdgePoint Philippines CEO Alexander Kiel.
EdgePoint Infrastructure Founder and CEO Suresh Sidhu, EdgePoint CFO Vicente Araña, and EdgePoint Philippines CEO Alexander Kiel
A typical cell tower can last 30 to 50 years. EdgePoint Philippines also said it assumes the usual problems brought about by maintaining such sites—including community issues, landlord lease issues, long-standing maintenance and improvements, and theft (involving equipment and cables).
EdgePoint Philippines has also revealed plans to put up Net-zero towers to reduce energy consumption, cut on carbon-emitting sources, and utilize renewable energy. “Net-zero towers would be better for us, for the customers, and for the environment. Those will be more efficient sites. We will design the towers to be more efficient and to use less land space,” Sidhu said.
Not more than a dozen Net-zero towers will be put up in 2023 (Quarter 3 or 4), initially outside Metro Manila.
[wpedon id=”7508″ align=”center”]