American Tower Corporation (ATC), one of the top wireless tower operators in the world, has acquired 51 per cent stake of a Bangladeshi company.
ATC had recently obtained the majority stake of Kirtonkhola Tower Bangladesh Ltd (KTBL). KTBL is a sister concern of Confidence Group - a local conglomerate.
KTBL is now planning to invest around US$1 billion in the wireless tower infrastructure of the country, said the company source.
Confirming the share transfer to the American Tower, Confidence Group Director Salman Karim told The Financial Express that KTBL was now aiming to either purchase or build around 11,000 to 12,000 towers.
As KTBL can't purchase all towers due to some regulatory guidelines, it is going to buy as many as possible, he added.
In 2018, the telecom regulator issued licences to four companies - Edotco Bangladesh Company, Summit Towers, Kirtonkhola Tower Bangladesh, and AB Hightech Consortium - to build, lease and operate telecom towers in the country.
Transcend Infrastructure Holdings, a subsidiary of American Tower, was the partner of KTBL when it received the licence back in 2018. With the new move, ATC now formally owns a major stake in KTBL.
As the market continues to evolve with the expansion of 4G network and 5G in the offing, both build-to-suit (BTS) and sale-and-leaseback opportunities for tower companies exist.
Presently, Bangladesh's tower market comprises around 40,000 sites, with the majority of those sites still held by the wireless carriers, particularly by Grameenphone and Banglalink.
Robi currently owns 2,470 towers. In 2015, the operator had sold off 5,258 towers to Edotco Ltd for $250 million.
Both Robi and Banglalink are now looking for prospective buyers for their towers, industry insiders said.
Bangladesh Telecommunication Regulatory Commission (BTRC) granted licences to these four tower companies allowing them to operate for an initial period of 15 years, with the possibility to extend this term incrementally by five years.
Of them, Edotco has a portfolio of around 12,000 towers and it manages different sites in Bangladesh. The company has around 11,000 towers of its own and 1,000 managed towers, primarily for wireless carrier Robi Axiata.
Edotco has added an average of 500 towers to its portfolio.
AB Hi Tech owns 250 and Summit Tower owns nearly 500 towers, according to the industry statistics.
KTBL now has less than 100 towers, but Confidence Group Director Salman Karim said by the end of the year, they would have around 300 towers.
As ATC joins KTBL, it is now planning to invest around $1 billion, he added.
In a further mature market, Mr Karim said, the number of total towers will come down to around 30,000 as the available tower infrastructure will be shared by all operators.
"So with the four companies in the market, KTBL can't hold even half of the towers of the total due to regulations," he said.
"So, the scope is limited," said Mr Karim, adding that KTBL was going to use investment facilities as much as it could.
According to a report titled 'Telecom Tower Market - Forecasts from 2021 to 2026', the global telecom tower market is expected to grow at a compound annual growth rate of 6.04 per cent over the forecast period to reach a market size of $105.262 billion in 2026 from $74.038 billion in 2020.
Telecom Tower Market refers to the infrastructure provided by the telecom players under the private ownership, shared infrastructure service or as a joint venture to provide the services of connection or data to the wide audience.
The telecom tower infrastructure carriers operated on the model of finding the property to install the tower at the reasonable price, having permits arranged and constructing the facility on behalf of the telecom companies in return for a rent.
This modus operandi has remained for a substantial period under the telecom tower space with the intent of increasing the customer base, said the report.
The sector has witnessed a growth in terms of service streams to mobile connections, broadband, internet and others.
However, despite such advancements at the global level, there are three billion people across the globe remaining unconnected to telecommunications, said the telecom tower market report referring to IFC reports.
This calls for the last mile connectivity programmes from telecommunications service and tower infrastructure providers.
With the change in the market dynamics, the telecom tower companies are now motivated to undertake the route of digital transformation with advancement in technology to 5G, growing competition, altering the tower specifications, and increasing rural markets customer base, the report added.
