American Tower is expanding in Brazil, adding roughly 4,600 towers to the 7,200 towers it already has in that country. The company is buying BR Towers S.A for just under $1 billion. The purchase price will be a combination of cash and the assumption of debt. American Tower expects BR Towers to own about 2,530 towers and have exclusive use rights for roughly 2,110 towers by the time the deal closes in the fourth quarter.
Olivier Puech, CEO of American Tower’s Latin American operations, told RCR Wireless News last month that American Tower has roughly 7,200 towers in Brazil. The company acquired 2,790 Brazilian towers from NII Holdings last year.
Puech said that in Brazil, the first focus has been on increasing coverage in urban areas, but that now there is more construction and co-location activity in rural areas.
“We see a lot of focus from the regulators and the operators, and us as well, on trying to build new towers or co-locate the operators in more rural areas which are highly populated … like the northeast of Brazil and some parts of Mexico,” said Puech.
American Tower and BR Towers have both been active buyers of Brazilian towers during recent years. According to Analys Mason, these two buyers have paid less per tower than some of their competitors. The chart below shows amounts paid per tower in Brazil in recent transactions.
Source: Analysys Mason
American Tower will be paying roughly $210,000 for each of the BR Towers, based on 4,640 towers acquired for a price of $978 million at current exchange rates.
American Tower estimates that as of 2013, there were 270 million wireless subscribers in Brazil. Wireless penetration was 136%, indicating that many users have multiple devices. The top four carriers in Brazil are Vivo, TIM, Claro and Oi, and all of these have started the rollout of 4G technology.
Watch the RCR Wireless interview with Olivier Puech from PCIA’s 2014 Wireless Infrastructure Show in Orlando:
American Tower bets a billion on Brazil
ABOUT AUTHOR
