Brazilian telecom infrastructure outsourcing market is heating up. The P2 Brasil fund, a joint venture formed by Pátria Investimentos and Grupo Promon, have announced a new startup, Highline do Brasil, focused on providing sites and distributed antenna system (DAS) infrastructure to carriers. The new company is headed by Alexandre Braga, the former Brazilian head of the American Tower Corporation, part of the global infrastructure provider that builds, manages and operates a network of wireless communication towers in Brazil and other countries around the world.
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Braga left American Tower Corporation last November to assume the position of president and managing partner at Highline do Brasil. Between 2001 and 2012, he held several executive positions at ATC, including: vice president, managing director of Brazil (P&L management) and vice president, business development for Latin America (M&A and business start-ups).
The Highline do Brasil announcement follows the recent creation of the tower management company, BR Towers, owned by GP Investments with a total capital commitment ranging from U.S.$90 million to U.S.$164 million.
Highline do Brasil is a startup that will serve private clients, mainly large operators, providing mobile telephony infrastructure with a focus on building and buying assets, including sites, such as towers and structures on top of buildings, and DAS, which might be linked to long-term contracts with carriers. P2 Brasil has made an initial investment of about U.S.$144 million (R$300 million) in the company.
These two recent moves show high expectations for the Brazilian telecom infrastructure market. Some carriers, such as Telefónica, have already indicated they plan to move away from owning and managing towers to focus more on business strategy and models. Previously, GP Investments said that with telecom companies having to meet 3G and 4G coverage goals during the next five to 10 years, the tower market will inevitably face a considerable expansion through both amendment (adding antennas on existing towers) and cell splitting (constructing new towers).
Highline do Brasil said in a statement that the mobile phone industry in Brazil has superlative numbers, and demand and investment are expected to increase in the coming years.
Of the approximate 60,000 cellular sites currently in Brazil, about 15% are controlled by independent operators, according to Highline’s data, The startup estimates there will be a need for two to three times the amount of the country’s current infrastructure in coming years, and participation of independent operators will rise up to 40% becoming similar to the United States market.
Alexandre Braga said in a statement that mobile telephony infrastructure needs are increasingly visible since consumers and the government itself have brought more attention to the quality of services. Braga also noted that to meet current and future demands, including the upcoming World Cup and Olympics in Brazil, the country will need heavy investment in infrastructure to support phone operators.
