XL Axiata to sell more telecom towers for $250m

Indonesia’s XL Axiata has arranged to sell 2,500 more telecom towers for 3.56 trillion rupiah ($250 million) as part of an ongoing asset management reorgnization.

XL has agreed to sell the towers to local tower operator Professional Telekomunikasi Indonesia (Protelindo) and rent most of them back for 10 years as the anchor tenant.

Announcing the move, XL said it expects to benefit from significant capex and opex savings, and plans to use proceeds from the sale to help further reduce its debt.

The operator is also expected to use the divestment to help more aggressively roll out 4G services.

XL already sold 3,500 towers to PT Solusi Tunas Pratama (SUPR) as part of a deal arranged during 2014, and used the proceeds to reduce its debt burden.

In related news, credit ratings agency Moody’s has recently published a report predicting that telecom tower companies in Indonesia as well as India are well-placed to continue growing.

Tower companies in the two markets are the most developed in Asia, Moody’s said. But the company noted that geographical, operational and regulatory differences between the two countries will affect their growth rates and financial performance.

“We expect continued growth in both markets as mobile operators, building out and strengthening their third- and fourth-generation (3G and 4G) footprints, will seek to lease tower space and sell more of their own towers,” Moody’s assistant vice president and analyst Nidhi Dhruv said.

“In this context, we expect overall year-on-year revenue growth of about 8%-10% for tower operators in both countries during the next one to two years.”