Why is Smart and Sun selling off their cell towers?

For many, it was quite a surprise that PLDT was selling off Smart and Sun Cellular towers to 3rd-party tower companies. The move seemed a bit off considering that, for the past several years, one of the biggest problems why mobile connectivity is still a huge concern among consumers in the Philippines and that is because the number of cell towers isn’t enough to properly cover the entire archipelago.

So why is PLDT selling off their towers? Here are some possible explanations.

PLDT included in the sale agreement that they will be leasing these very same cell towers from the new owners. That means whatever network coverage they had in these areas will continue to be served even after the sale.
PLDT can use the Php77USD 1INR 111EUR 1CNY 10 billion funds they’ll get from the towers to build newer ones in areas that have little to no network coverage. No need to borrow new capital for expansion. OR, they could partially pay off some of their debts from previous capital expenditures.
Leasing cell towers can be less expensive in the long run since there will be no more maintenance costs associated with exclusively operating one.
Faster network roll-out. Combining self-operated and leased cell towers can fast-track the network expansion.
With leased towers, no more headaches from 29 to 35 documentary requirements and permits associated with building a new tower (although in September 2020, these were all reduced to 1 permit 10).

In a way, this is a smart move for PLDT. Even Globe telecom is doing the same thing. The more 3rd-party tower operators we have, the faster the roll-out of network and service coverage.

Abe Olandres

Abe is the founder and Editor-in-Chief of YugaTech with over 20 years of experience in the technology industry. He is one of the pioneers of blogging in the country and considered by many as the Father of Tech Blogging in the Philippines. He is also a technology consultant, a tech columnist with several national publications, resource speaker and mentor/advisor to several start-up companies.

https://www.yugatech.com

5 Comments

Alfie says:

3 years ago

I think what you have missed is that letting go of tower component of PLDT’s business, they can now focus more on its core business which is network improvement and optimization.
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Abe Olandres says:

3 years ago

Thanks for pointing that out!

gfg says:

3 years ago

Diba ito din yung aim noon na may common tower. Wasn’t that a proposed law?
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A. de Borja says:

3 years ago

If Smart & Globe are selling their towers, you have to assume they know what they are doing. (Although given their dismal quality of service, it is a hard proposition to swallow. But then the Smart/Globe duopoly continue to rake in money so by that measure they know what they are doing).

You can’t operate a cell business without the ability to send 2-way transmissions so there must be new technologies that we still are unfamiliar with that are coming. Elon Musk is launching a multi-satellite system that will blanket the earth with digital transmission interconnectivity. No towers, no wires, no undersea cables. That looks like the next breakthrough so towers may become obsolete in 5-10 years.
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Dianna Jane says:

3 years ago

By selling the towers and leasing them, they’ll be able to save maintenance costs, which they can allot to other things like network expansion and rollout.
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