Licensed to thrill: Asian telecoms M&A rockets on India 5G sales

Data InsightDealspeak 27 September

Licensed to thrill: Asian telecoms M&A rockets on India 5G sales

The Indian government’s blockbuster sale of 5G spectrum licenses to the country’s operating giants has propelled M&A in the Asia-Pacific telecommunications sector to its highest deal value in 14 years.

APAC countries have generated USD 46.2bn from telecoms M&A in the year to date (YTD), the largest YTD deal value since 2008 and a jump of 41.6% year-on-year (YoY), despite a 9% decrease in deal count. The region has surpassed the Americas, where value has plunged 80.3% YoY to USD 29.7bn. EMEA holds top spot in 2022, raising USD 54.3bn YTD.

Dealmaking in India is the main driver of the surge in M&A activity, accounting for 62.2% of total value and 16% of total volume. Sales of 5G spectrum licenses account for the lion’s share of transaction value:

  • 700MHz, 800MHz, 1,800MHz, 3,300MHz and 26GHz bands have gone to Reliance Industries and Reliance Jio Infocomm for USD 11.1bn.
  • 19,800MHz band has been secured by Bharti Airtel for USD 5.4bn.
  • 3,300MHz and 26GHz bands have been awarded to Vodafone Idea USD 2.4bn.

Holding the line

The Indian government’s hand is visible in another important deal – the recapitalization of loss-making, state-run Bharat Sanchar Nigam Ltd (BSNL) for USD 4.2bn. The move shows New Delhi’s intention to retain a state presence in a sector that is key to the country’s development strategies, as well as national security.

The largest private-sector transaction in India has been the sale of a 51% stake in Viacom 18 Media to Bodhi Tree Systems, Reliance Industries, Reliance Projects & Property Management Services and Paramount Global for almost USD 2bn.

Private players have also emerged in two high-profile deals relating to Indian telecoms services provider Bharti Airtel [BOM:532454]. The company received equity investment of nearly USD 700m from Alphabet Inc’s [NASDAQ:GOOG] Google, which was finalized in July. A month later, it sold a 3.36% stake to the Mittal family for more than USD 1.6bn.

Tower power

Dealmakers are increasingly active in seizing opportunities relating to telecoms tower portfolios.

  • In April, Australian telecoms tower business Axicom was sold to AustralianSuper and Singtel’s [SGX:Z74] Australia Tower Network (ATN) for USD 2.7bn.
  • During the same month, Saratoga Investama Sedaya [IDX:SRTG] sold a 24.97% stake in Indonesia’s Tower Bersama Infrastructure [IDX:TBIG] to Provident Consolidated for more than USD 1.2bn.

Vodafone New Zealand, Australia’s TPG Telecom, as well as Philippines-based PLDT [PSE:TEL] and Globe Telecom [PSE:GLO] have all been among the major divestors of mobile towers in Asia.

Telecoms operators across Asia are seeking to divest or forge joint-venture partnerships for their tower operations and data centers to raise capital for investment in 5G, data centers and network expansion. More action is expected to follow across India and Southeast Asia in the coming months.

According to media reports, Indonesian tower operators Protelindo and Malaysia’s Edotco Group are mulling a share sale. In addition, India’s BSNL is said to have initiated the sale of 10,000 telecoms towers in a potential deal worth USD 500m, while Philippines-based Converge ICT [PSE:CNVRG] is reportedly exploring a possible partial sale of its infrastructure platform.

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