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IHS Towers mulls neutral fiber networks in Colombia, Peru

Bnamericas Published: Thursday, October 20, 2022
IHS Towers mulls neutral fiber networks in Colombia, Peru

IHS Towers is mulling expanding the neutral fiber network model it developed in Brazil with TIM to other markets where it operates with towers and related telecom infrastructure, Farès Nassar, CEO of IHS for Latin America, told reporters during the Futurecom conference in São Paulo.

Nassar named Colombia, Peru and Nigeria as examples of countries where the Brazilian model could be reproduced.

“We are currently looking at all these markets to replicate the Brazilian format,” Nassar said in reply to a BNamericas question.

In Colombia, Telefónica has in operation since January this year On Net Fibra, a neutral fiber JV with US fund KKR. Other neutral host players operating in the Colombian market include Ufinet and ETB, both of which signed up Millicom’s Tigo Colombia three months ago.

“Brazil already has a much higher penetration than many of these countries in the region. So there’s still a lot of opportunity to build first and worry about competition later," the CEO added.

In Brazil, the I-Systems JV with TIM is expected to soon announce contracts with ISPs and regional providers for the use of the fiber network.

Of the three national neutral fiber networks that have telcos as partners and anchor tenants, I-Systems remains the only one not to have announced any client.

“We are treading carefully. We want to make sure that all the connectivity infrastructure, all the billing software, that all of this is in order before we announce [customers]. Because between announcing a client and having it up and running, we want days to pass, not weeks and months,” said Nassar in response to another BNamericas question.

I-Systems has 7mn homes passed with fixed broadband to date, the bulk of which are for its anchor-tenant TIM. Around 2.8mn of this base still corresponds to copper and the remaining 4.3mn to fiber. The goal is to convert all to fiber over time, while deploying new FTTH.

Also, according to Nassar, around 300 of TIM’s towers are connected by fiber. IHS Towers itself has nearly 7,000 towers in Brazil.

Commenting on competition with other neutral networks, Nassar estimates that it would take 2-3 years to cover all the 15-20mn homes still not covered with fiber broadband in Brazil.

“Until then, what will probably happen is some consolidation, intense competition... normal market movements,” he said.

I-Systems has been expanding at a pace of 120,000 homes passed per month. That compares, for example, with around 500,000 homes passed a month by rival V.tal, which has already announced contracts with over 50 ISPs for the use of its network.

“Our goal [of homes passed] for the year is big, but it will depend a lot on the new customers that we are yet to announce. Because these new customers are going to ask us for areas that we're not in yet,” he said.

Asked by BNamericas about fiber acquisitions, Nassar said the London-headquartered company is assessing different access networks available in the market for potential M&As. He hinted that non-disclosure agreements have been signed with a handful of companies already.

Among the assets that could be up for grabs in Brazil, EB Capital is said to be looking for a buyer for its fiber business Alloha Fibra while federal oil company Petrobras announced the sale of its onshore fiber networks.

EDGE DATACENTERS

In addition to towers, small cells, wireless infrastructure and fiber, IHS is looking at edge datacenters, said Nassar.

The strategy, which could involve a mix of acquisitions and greenfield projects, would be to integrate these sites to the ecosystem of fiber and towers in certain metropolitan regions of Brazil, he said.

Nassar added that IHS is analyzing the sets of mobile towers that used to belong to Oi and that now, upon the antitrust watchdog’s demand, must be made available to the market by the three telcos that acquired Oi’s mobile operations.

MARKET

IHS entered Latin America in February 2020, following the acquisition of São Paulo-headquartered Cell Site Solutions (CSS), which had operations in Brazil, Colombia and Peru.

In 2021, IHS Towers acquired Skysites Holdings, which is focused on Brazil, and Centennial Towers, which has operations in Brazil and Colombia. 

In the first quarter this year, the company closed its latest M&A, adding 2,115 towers from Brazil’s GTS’s SP5 portfolio.

Including 5,691 towers recently acquired in South Africa, IHS ended June with 39,052 towers in 11 countries, up from 30,207 a year earlier, which reportedly makes it the third largest independent multinational tower company as measured by sites after American Tower and Cellnex. 

Of these, 7,139 were in Latin America, up from 4,629 in June 2021. Its second global market after Nigeria, Brazil leads the region with 6,859 sites, while a further 228 were in Colombia and 52 in Peru.

The group’s main regional clients are Brazil’s top four carriers Telefônica, Claro, TIM and Oi; Colombia’s Tigo, Claro and Avantel; and Peru’s Entel and Bitel.

The group expects to end 2022 with 400 new sites deployed across the region.

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