Globe Telecom Inc. on Thursday disclosed that it has reached another milestone in its P71-billion tower sale initiative, after closing another deal with Frontier Tower Associates Philippines Inc.
In a regulatory filing, Globe said it has completed the sale of an additional 120 telecommunication towers to Frontier for P1.5 billion.
This latest transaction brings the total number of towers acquired by Frontier Towers to 2,214 out of the 3,529 earmarked for sale.
The recent closing is part of Globe’s ongoing efforts to optimize its assets and focus on its core business operations. The company initiated this ambitious project in 2022, by signing agreements with MIESCOR Infrastructure Development Corp. (MIDC) and Frontier for the sale of 5,709 telecommunication towers and related infrastructure for P71 billion.
Over the past year, Globe closed several deals with the two tower companies.
In September 2022, Globe closed the first of the tranches, selling 800 towers to Frontier Towers for P10.2 billion. This was followed by a series of transactions with both Frontier and MIDC, gradually transferring ownership of these vital telecommunications infrastructures.
Globe completed a sale of 701 towers to MIDC for approximately P8.4 billion in October 2022. Subsequent closings with MIDC included the sale of 159 and 160 towers in December 2022 and May 2023, respectively, for around P1.9 billion each, along with a smaller transaction of 29 towers for P348 million in September 2023.
Frontier and Globe also had significant closings including 750 towers for P9.5 billion in December 2022, 431 towers for P5.5 billion in May 2023, and 113 towers for P1.4 billion in August 2023, leading up to the recent transaction.
Globe has said that the “transaction will allow Globe to efficiently raise capital, redeploy capital from passive infrastructure to active equipment, improve balance sheet health, and leverage expertise of tower companies.”
The Ayala-led telco is spending roughly $1.3 billion (or about P73.8 billion) in capital expenditures (capex) this year, lower than the $1.9 billion (or about P107.9 billion) in 2022.
Globe is further reducing its capex to $1 billion (or about P56.8 billion) in 2024.
The company saw its profits dwindle by almost a third to P19.36 billion in the first nine months of the year from P26.50 billion the year prior, despite posting all-time high consolidated service revenues no thanks to higher depreciation costs and a non-operate charge versus last year.
It closed the period ending September with an all-time high consolidated revenues of P121.1 billion, up by 3 percent from a year prior “despite the extended macroeconomic headwinds faced by the industry.”