Globe nets P85 billion from sale of towers

MANILA, Philippines — Telco-to-tech provider Globe Telecom Inc. raised more than P85 billion in proceeds from the sale of its towers after transferring the final batch of units to Frontier Tower Associates Philippines Inc.

In a disclosure to the Philippine Stock Exchange, Globe said it has turned over all 3,529 towers bought by Frontier Towers, wrapping up a P45-billion sale signed in 2022.

The last tranche consisted of 1,037 towers worth P13.17 billion, split into 84 percent ground units and 16 percent rooftop assets.

Globe has collected 88 percent, or P85.2 billion, of the P96.4 billion in proceeds from its sale and leaseback agreement with independent tower operators. This equates to 6,628 towers transferred to the respective buyers, leaving the telco with just 878 more to turn over.

So far, Globe has handed over 2,161 towers this year, totaling P27.8 billion. Before this, the telco transferred 2,410 towers in 2022 and 2,057 units in 2023.

Globe chief finance officer Rosemarie Maniego-Eala said the telco gained a fiscal bump from the conclusion of its tower deal with Frontier Towers.

To recall, Globe received P57.4 billion in proceeds from its tower deals at the end of 2023, and is aiming to encash the balance of P39 billion within 2024.

As was announced right from the start, Globe plans to allocate gains from its tower transactions to fund capital expenditures and pay maturing debts.

Overall, Globe is reworking its finances to attain a certain level of cost efficiency, with the target of becoming cash flow positive by 2025. As part of this, Globe has brought down its capex by 22 percent to P55 billion this year, from P70.6 billion in 2023.

However, Globe is struggling to minimize the impact of broadband losses and depreciation costs to its balance sheet. Globe’s net income sank to P6.8 billion in the first quarter, from P7.3 billion a year ago, on decreasing broadband subscriptions and increasing depreciation expenses.

For Frontier Towers, the completion of the Globe deal inches it closer to its objective of putting up a portfolio of 5,000 towers in the Philippines.

Frontier Towers is a subsidiary of Pinnacle Towers, which is in the business of operating telco infrastructure in Asia and is keen on growing in the Philippines.