Kohlberg Kravis Roberts (KKR) said it is to invest in Pinnacle Towers in order to support the latter's plan to build an independent telecom tower platform (TowerCo) in the Philippines.
No details were provided about the level of the investment, which was made through KKR's infrastructure fund. The move represents KKR's second infrastructure investment in the Philippines, although the first was in power producer First Gen rather than in a telecom infrastructure provider.
Pinnacle's main subsidiary is Frontier Tower Associates Philippines (FTAP), which has secured a provisional license to operate in the Philippines tower market from the Department of Information and Communications Technology (DICT).
DICT recently issued approvals to 23 tower companies including FTAP, allowing them to build and operate cell towers.
KKR clearly intends to exploit the opportunities in this recently liberalized market.
David Luboff, partner and head of Asia Pacific infrastructure at KKR, said the rapid growth of the telecoms sector in the Philippines in the past few years amid the increasing demand for connectivity "has led to a resource imbalance and the need to expand existing infrastructure to allow operators to provide better service and coverage to their customers."
Luboff said the investment in Pinnacle "reiterates our commitment to addressing this need and supporting the Philippines' transition to a connected, digital nation."
KKR has already invested in tower companies in Europe and India. In 2017, it agreed to buy 40% of Telxius from Telefónica, and in 2018 it invested in France's Hivory, formed in partnership with Altice. In 2017 it acquired a stake in Bharti Infratel.
In addition, KKR owns stakes in other telecoms infrastructure providers such as Hyperoptic, a fiber-to-the-home (FTTH) provider in the UK. KKR acquired a majority stake in the company in 2019.
The investment group is also involved in Telecom Italia's complicated plot to create a single fiber company in Italy. Furthermore, it is one of the three private equity firms that formed Lorca Telecom – a consortium that is on track to buy Spain's Másmóvil. Also worth noting is its acquisition of a stake in India's Jio Platforms this year.
KKR acquired a majority position in Deutsche Glasfaser in 2015 but sold its stake early this year.
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— Anne Morris, contributing editor, Light Reading