Flow parent sells tower to cut costs

Liberty Latin America says its Flow operations in Jamaica and other territories have reached an agreement to sell a large block of cell towers to American company Phoenix Tower International in a deal worth US$355 million.

The deal with Flow initially covers 1,300 sites across six markets: Panama, Jamaica, The Bahamas, Puerto Rico, Barbados, and the British Virgin Islands. Phoenix will rent the towers back to the telecoms after taking ownership of the towers.

The number of towers sold in Jamaica was not disclosed, nor the number that will remain in Flow Jamaica’s possession after the sale.

“Net proceeds are expected to be used to reduce debt and further invest in the company’s businesses,” said Liberty in a press release.

Liberty Latin America, whose operations are spread across the Caribbean and Central America, holds debt of US$7.9 billion.

The transaction also provides arrangements to extend coverage with a further 500 sites being built by Liberty Latin America and Phoenix over the next five years. Inclusive of these commitments the total proceeds would increase to US$407 million.

The tower deal comes five years after Digicel Group similarly struck a sale and leaseback agreement with Phoenix under which the telecoms disposed of 450 towers in a move that also reduced its debt load.

Phoenix operates 24,000 telecom towers throughout the United States, Latin America, the Caribbean, and Europe, spanning 24 countries.

“We are pleased to work with a high-quality partner with extensive operating experience in our region in Phoenix and reach an agreement that crystallises the value of our mobile tower infrastructure assets. In addition, the long-term lease agreements and ongoing coverage extension will enable us to continue delivering leading mobile services to our customers and support network expansion including future 5G deployment plans across the Caribbean and Latin America while lowering capital costs associated with these assets. This deal is a great example of our disciplined approach to delivering shareholder value through free cash flow accretive transactions,” stated Balan Nair, president and CEO of Liberty Latin America on the deal that’s subject to regulatory approvals.

Liberty’s total assets are valued at US$13.3 billion, and its capital stands at some US$2.4 billion.

“As the largest independent owner of wireless towers in the Americas, we look forward to enhancing wireless access in these markets by serving all our wireless customers and the populations of the region with better connectivity and solutions to help our business partners achieve their goals,” said Dagan Kasavana, CEO of Phoenix Tower International.

The deal will see Phoenix entering The Bahamas, the British Virgin Islands, and Barbados as new markets.

Flow in Jamaica reported US$103 million in revenue for the July-September quarter, which reflected softening by 5.0 per cent compared to a year ago.

The reduction “is due to the fact that Flow Jamaica exited a transit traffic agreement at the beginning of 2023,” said Flow Jamaica’s Director of Communications Kayon Mitchell. “This had a US$10 million negative impact on revenue results,” she said.

Over nine months to September, the local telecoms’ revenue were also down from US$319 million to Jamaica totals US$302 million.

Despite the dip in revenue, Flow Jamaica reported growth in the number of homes it serves. Its cellular customer base now hovers at 1.2 million users.

steven.jackson@gleanerjm.com