July 13, 2004 — While Carlos Slim plans to divest landline and mobile subscribers to reduce Telcel from its market dominance, he said it does not represent an opportunity for a tower company to buy a large cache of towers in the country. Slim’s comments were made in an interview with Reuters last Friday.
The press release that announced the divestiture said that all cell sites will be “separated from Telcel for their corresponding operation and commercialization to all interested parties.” But publications, such as the Financial Times, have already begun to speculate that American Tower and SBA Communications would purchase the tower portfolio.
“[The press release] says the [towers] will be separated, not sold,” Slim told Reuters. “What’s being proposed is to open up the cell phone towers … so they can be rented to anyone interested in renting towers.”
Marc Ganzi, CEO, Digital Bridge Holdings, which is a partner in Mexico Tower Partners (MTP), welcomed the loosening of Carlos Slim’s grip on the Mexican market, saying the divestiture would be positive for the Mexican consumer.
“It should accelerate wireless deployment, especially if the number two and three carriers, Iusacell and Telefonica, get a chance to collocate on the Telcel towers. It gives them a chance to increase their coverage areas and compete on better footing,” Ganzi said.
MTP enjoys a good working relationship with Telcel. “Mexico Tower Partners continues to buy and build towers, and sign collocation leases,” Ganzi said. “We continue to have a great working relationship with Telcel. That is the most important thing. We continue to build sites for them and they collocate on our sites. They are an incredibly valuable partner to us.”
MTP has more than 620 geographically dispersed tower sites in Mexico generating more than $5.5 million in cash flow, while American Tower holds more than 8,300 sites in the country. It would appear that the Telcel towers are not currently on the market but they may be in the future.
“It is a natural progression in any market for a carrier to monetize its towers, but the possibility of Telcel’s towers coming on to the marketplace is a bit different because of its dominant position,” Ganzi said. “If any towers go on the market, we would be an interested buyer and, behind American Tower, one of the most qualified.”