Confident in the Model and able to Minimize Investment Risk
by Securing PO Before Commencing Construction with Advance Annual Lease Income
Mr. Theerachai Leenabanchong, UWC Chief Operating Officer, reveals that the company is vertically integrating and expanding in telecommunication tower for lease in the Philippines allowing company to realize recurring income from lease revenue for the period of 25 years with, but not limited to, CHINA TELECOM. CHINA TELECOM as the third operators among GLOBE and SMART has, in year 2021, invested over USD 567 million or THB 17,000 million in the country. With the demand for internet connectivity and the government national policy to strengthening its telecom infrastructures under ‘The Common Tower Policy’, investment from the 3 operators are heavily poured in; ranking Philippines among the Top 10 nations worldwide of most invested in telecom industry.
The Department of Information and Communications Technology (DICT) has granted UWC with the certificate of registration as an Independent Tower Company (ITC), an entity engaging in the business of leasing telecommunication towers to multiple major mobile network operators within the country. In the Philippines, UWC has successfully established a subsidiary known as ‘SkyTowers Infra Inc.’ and has teamed up with Mariwasa Siam Ceramic Inc., an associate of Thailand’s giant conglomerate Siam Cement Group (SCG), to cooperate in logistic, warehousing, transportation and human resources.
With the tower leasing business model, the investment and construction of telecom station will commence only after the conclusion of lease agreement with operators. This structure ensures company with recurring lease income from its investment and correspondingly the investment risk is substantially minimize. In addition, all telecom stations constructed are retained as the asset of the company that can generate long term 25 years recurring income.
The 3 years SkyTowers projection plan is 620 telecom stations by year 2023 (140 stations in 2021, 240 stations in 2022, 240 station in 2023), which can generate over THB 550 million or USD 18.5 million annually of lease revenue. Base on the 25 years lease revenue from single tenant of operator, the net profit margin is at 42% with the project IRR of 18% and equity IFF of 28%. Nonetheless, under the mentioned Common Tower Policy, Independent Tower Company may lease their telecom stations to multiple operators purposing vast opportunity and returns for the company.