KUALA LUMPUR: edotco Group Sdn Bhd's subsidiary in the Philippines has inked a PHP42bil (RM3.42bil) deal to acquire 2,973 telecom towers in the country through a sale and lease back transaction with subsidiaries of PLDT Inc.

       In a separate agreement, edotco was also granted the commitment to build and develop 750 build-to-suit (BTS) sites for leasing to PLDT in the future.

       The telco group, which is a 63%-owned subsidiary of Axiata Group Bhd, said the acquisition would make it the leading tower company in the Philippines with 3,073 towers.

       "This deal is a highly strategic transaction for edotco and is the first step to its market expansion, allowing it to become the number one independent TowerCo in the country.

       "Given that the TowerCo market in the Philippines is still nascent, the transaction provides a critical first-mover advantage with an established and sizeable platform, enabling the company to diversify and strengthen its pan-Asian platform," it said in a statement.

       It said the purchased tower portfolio, one of two being divested by PLDT, was strategically selected for its significant growth and colocation potential that will provide the company with immediate scale and access to a nationwide platform.

       It said the portfolio comprises a wide geographical spread of sites located across Metro Manila, South Luzon, Palawan, Visayas and Mindanao, which gives edotco access to the underserved southern region that is expected to be the next frontier for telecom infrastructure developments driven by the rollout of 4G/5G and network densification requirements.

       "The transaction presents a unique opportunity for edotco Group to gain immediate scale in a market with significant infrastructure needs while establishing a partnership with PLDT, a highly reputable and reliable anchor tenant.

       "Being the largest TowerCo in the Philippines, edotco can be instrumental in shaping and developing the communications infrastructure in the country while creating value for its shareholders,” said edotco Group chairman Datuk Nik Ramlah Nik Mahmood.

       edotco Group CEO Adlan Tajudin added that the transaction diversifies and strengthens its pan-Asian platform with exposire to a nascent, high-growth market with strong government support.

       "With an established platform in the Philippines, edotco can play an instrumental role in developing the nation’s digital economy infrastructure while accelerating its organic and inorganic growth strategy," he said.

       The 750 Committed BTS orders are expected to be situated in strategic locations with high colocation potential driven by the rollout of 4G/5G and network densification requirements.

       Additionally, out of the 2,973 towers being acquired, 2,643 or 89% are ground-based towers, which are in majority over 40m in height, making them optimal for colocation activity.

       The acquisition is scheduled to be completed by the end of this year upon the conditions precedents in the sales and purchase agreement being fulfilled.

       Trading in the shares and warrants of Axiata was halted from 9am to 10am on Wednesday in light of the announcement. The share was last traded at RM3.60 a unit on Monday.