PLDT, the largest integrated telecoms company in the Philippines, has announced that its subsidiaries, Smart Communications and Digitel Mobile Phils., have signed a Sale and Purchase Agreement with Frontier Tower Associates Philippines for the sale of 1,012 telecommunications towers and associated passive telecommunications infrastructure for over PHP12.1 billion ($239 million).

This brings the total number of towers monetized via sale and leaseback transactions to over 7,500 for a total consideration of more than PHP98 billion ($1.93 billion).

Frontier is a subsidiary of Pinnacle Towers, an Asia-focused digital infrastructure platform with a strong focus on the Philippines market, in which KKR invested in 2020. The towers being monetized are primarily located in Luzon.

Concurrent with the Sale and Purchase Agreement, Smart entered into a Master Services Agreement with Frontier on similar terms as the previous agreements.

Upon completion of the transaction, Smart will lease back the towers for a period of 10 years at competitive terms as the anchor tenant. The sale and leaseback will be complemented by a commitment of 550 new points of service from Smart over the next few years.

The transaction is expected to generate a material gain on disposal for PLDT, supporting the current administration’s “Build Better More” program, which incorporates a strong digital infrastructure program to ensure that Filipinos have access to affordable and reliable internet.

The closing of the transaction will be staggered based on the number of towers being transferred and subject to customary closing conditions, with all closings expected to be completed in 2023. UBS AG acted as exclusive financial adviser to PLDT and Smart on this transaction.

PLDT and Smart’s President and CEO, Alfredo S. Panlilio, stated that the sale represents another important milestone in their asset-light strategy focused on operational efficiencies and best-in-class customer experience, supporting the government’s digital roadmap for the Philippines.

Panlilio is also a member of the Private Sector Advisory Council Digital Infrastructure group that supports the nation’s development blueprint and digitalization agenda through the GoDigital Pilipinas movement.

Frontier’s Chairman and CEO, Patrick Tangney, said that the partnership with PLDT is built on a foundation of trust, and that this transaction provides a wonderful opportunity to enhance digital connectivity and inclusion throughout the Philippines for PLDT and the people of the Philippines. –