Welcome to the 5th TowerXchange Meetup Americas

Wi-Fi network: BOCA-MEETINGWi-Fi password: tower123

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TowerXchange’s analysis of the global and CALA telecom infrastructure industry

Kieron Osmotherly, Founder and CEO, TowerXchangeArianna Neri, MD – Americas and Asia, TowerXchange

Twitter: #txmeetupamericas

Community: http://www.linkedin.com/groups/TowerXchange-4536974

Research: www.towerxchange.com

Networking club for towercosMeetups, CXO dinners, must-read-journal, 3 million words of research, who’s whos

Meetup China 2018 27-28 September, Beijing

Meetup Africa 2018 9-10 October, Johannesburg

Meetup Asia 2018 4-5 December, Singapore

Meetup MENA 2019 29-30 January, Dubai

Meetup Europe 2019 2-3 April, London

Meetup Americas 2019 9-10 July, Boca Raton

The new market structure in which towercos own 67.4% of towers

TowerXchange is tracking 279 towercos that now own 2.966mn of the world’s 4.4mn towers

China Tower Corporation*1,900,000

29 other towercos with 5,000-20,000 towers286,590

235+** other towercos with <5,000 towers213,175

American Tower150,975

Indus Towers 122,962

IHS Towers 22,860

Cellnex 27,044

SBA Communications27,879

GTL Infrastructure28,000

edotco 29,512

Deutsche Funkturm34,700

Bharti Infratel39,363

Crown Castle40,039

Reliance Infratel43,000

* China Tower Corporation area reduced to better illustrate the relative global market share of the other towercos – if illustrated to scale, China Tower Corporation’s area would be almost double the scale of the rest of the industry combined**<5,000 towers segment includes an estimated 37,500 towers at several hundred unidentified towercos, plus an estimated 2% organic growth rate applied to towercos that have not disclosed updated counts

Towerco penetration and business models in different regions

Global

52.6%

13.5%1.3%

32.6%

Operator-led towerco Pureplay independent towerco Joint venture infraco MNO-captive sites

China

India

CALA

Oceania

S & SE Asia(Exc India)

Europe

N & E Asia(exc China)

97.3%2.7%

15.4%

15.5%

9.6%

59.6%46.6%

21.8%

31.5%

14.7%66.1%

19.2%100%

11%

36.1%

48.2%

13%

87%

USA & Canada

7%

66%

27%

15.6%

SSAMENA99.5%

0.01%0.04%

4.6%59.2%

36.2%

Operator-led towerco Pureplay independent towerco Joint venture infraco MNO-captive sites

China

India

CALA Oceania

S & SE Asia(Exc India)

Europe

N & E Asia(exc China)

97.3% 2.7%

19%

10%

40%47%

22%

32%

20%66%

14%

100%

11%

40%49%

8%

92%

USA & Canada

7%

66%

27%11%

SSAMENA99.99%

0.01%0.2%

61%

39%

Global comparisons of towerco business models

Source: TowerXchange

CALA extension:replicated, evolved... sold out?

Africa’s powercos:new complexities, new value creation

Asia’s native towercos:same same but different

Europe:deviates from standard structures,

business models

Gold standard

Tower industry 1.0: Vertical real estate

Tower cash flowTowers

Rooftops

Passive infrastructure

Power-as-a-service

Amendments

Escalators

Accelerated rollouts

Build-to-suitTenancy ratio growth

Long-term contracts

Operational excellence

Real estate

Operational excellence

Monetise assets

Service Level Agreements

Master Lease Agreements

Credit worthy tenants Sale and leaseback

Credit worthy tenants

Sale and leaseback

REITs

Valuation

Improvement capex

Site level profitability

Permitting

Zoning

Pass-through

Anchor tenants

DAS

The Future Network: new business models for geographic coverage and urban capacity

An era when networks are dynamically, remotely configurable, rather than optimised by site visits and new equipment overlays

InnovationFixed / mobile convergence

In Building Solutions

MESH networks

Small cells

Airborne connectivity

Virtualisation

Software Defined Networks

Self Optimising NetworksSingle platform

IoT

Industry verticals

OrchestrationEdge data centres

End to end network slicing

C-RAN

Multi-host

Smart poles

Fronthaul

Massive MIMO

Multi-band antennas5G rollout

Self-deployVR and AR

Street furniture

Neutral host

Street furniturePublic safety networks

NFV

Multi-operator

Independent towerco lifecycles

Startup

Refinance

Divestiture

Risk of growth stallwith bad paper

First 100towers

500towers

Build-to-keepIPO

Build-to-flip

Consolidatedby rollup play

Sell tostrategic buyer

Privatepensionable

assets

Known active towercos in CALA

BTS Towers, AMT, Centennial, IIMT, Intelli Site, MTP, MX Towers, Uniti Towers, QMC, Rent-A-Tower, Tower One, Telesites, Torrecom

Balesia, Continental, SBA, Torrecom

AMT, Antyl, ATP, Balesia, Innovattel, BTS Towers, PTI, SBA, Telxius

AMT, Antyl, ATP, Balesia, SBA, Telxius

BTS Towers, Aplicanet, Balesia, Ecuador Tower Company, Innovattel, SBA Communications

Balesia, Continental

Balesia, Continental, PTI, SBA

Balesia, SBA, Torrecom

AMT, Balesia, Catalina, PTI, SBA, TOCSA

BTS Towers, Continental, Innovattel, SBA, Torrecom

AMT, ATP, Centennial, Golden Comunicaciones, PTI, QMC, Telesites, Tower One, Uniti Towers

AMT, AlfaSite, BTC, CSS, Centennial, GTS, PTI, QMC, SBA, Skysites, Telxius

American Tower, SBA Communications, Atis Group, Innovattel/ Torresec, Plata Tower Company, Teletower Argentina, Telxius, Tower One, CSS, GME Alliance

Continental

Innovattel , PTI

Source: TowerXchange

Towercos have acquired the majority of towers from carriers

from carriers, but the majority remain carrier-owned.

Less SLB activity, but plenty of BTS towerco activity

Early stage market for BTS and/or SLB

Negligible towerco activity

Legend

American Tower, Innovattel

What did TowerXchange predict back 2015?

< SLBs to take place in Andean region

< Acquisitions to accelerate 2016/2017

< 10k operator captive towers to be sold

< 15k towers to be built by towercos

< 92k towers to be owned by towercos by 2016 (52% of 178K)

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By how much did the CALA tower market grow 2015-2018?

2015 total CALA towers

156,000175,530

Towercopenetration

44%

Towercopenetration

51.9%

Towercoowned 69,850

Towerco owned 91,130

Q118 total CALA towers

Where has the growth come from 2015-2018?

Towerco growth organic vs inorganic Share of new build

65%

35%

Inorganic

Organic

Towercos

MNOs

29%

71%

Mexico: highlights and growth 2015-18

< Tower inventory from 23,422 to 30,739< Telesites from creation (10.8k) to 15.3k portfolio< AT&T acquisition sparked BTS frenzy…< …which led to an overcrowded and irrational market< ALTÁN Redes’ 700MHz network from idea to reality

Mexico - Estimated tower count 30,739

Source: TowerXchange

Telesites

American Tower

Mexico Tower Partners

IIMT

Torrecom

Intelli Site Solutions

BTS Towers

Uniti Towers

Other independent towercos (QMC, Centennial,

Conex et cetera)

Estimated MNO captive towers

550215

313

15,386

9,209

1,850

1,001205

10 2,000

Central America: highlights and growth 2015-18

< Tower inventory increased from 10k to 13k< El Salvador opened up to SLB< More towercos entered Panama < Still good organic growth opportunities

MNOSBAContinentalTorrecomAMTPTITelesitesOther independents

7,5652,669

605

586494

477

284 289

Caribbean: highlights and growth 2015-18

< Tower inventory nearly unchanged ~10.5/11k

< DR and French Antilles only towerco markets

< Operational challenges / scale limitations still an issue

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Colombia: highlights and growth 2015-18

< From relatively rational to highly irrational market < Now back to “normality” with ~10 solid towercos< Still no 700MHz auction…!

American TowerPhoenix Tower InternationalSBA CommunicationsUniti TowersBTS TowersOther independent towercos (Andean Tower Partners, Innovattel, Continental, Balesia, Centennial et cetera)América MóvilTelefónicaMillicom

Colombia - Estimated tower count 15,566

Source: TowerXchange, Company reports, RBC Capital Markets estimates

6500

2000

1000

4597

364100

15189801

Peru: highlights and growth 2015-18

< Tower inventory from 9k to 10.7k< Towerco penetration still low and marginal SLB activities < Opportunities for organic and inorganic growth

Peru - Estimated tower count 10,761

Source: TowerXchange

Telxius

American Tower

SBA Communications

Phoenix Tower International

BTS Towers

Other independent towercos

(Andean Tower Partners, Innovattel,

Telecommunications Partners et cetera)

Claro

Bitel

Entel

Telefónica

DirecTV

838

285

810

80109

2,5002,500

2,100

550 849

140

Chile: highlights and growth 2015-18

< Tower inventory

from 8k to 9k

< From three to at least

six active towercos

< Still low towerco

penetration

< Country at the

forefront of innovative

site typologies

American Tower

Telxius

SBA

Other independent towercos (incl.

Andean Tower Partners)

Estimated MNO captive tower

América Móvil Telefónica

Entel Chile WOM

Chile - Estimated tower count: 8,958

Source: TowerXchange, Company reports, RBC Capital Markets estimates

~720

234

23611000

3000

10

1306

327

Brazil: highlights and growth 2015-18

< Tower inventory from

48k to 57k

< Oi bankruptcy, recession

and political instability

< …All of the above on

the mend!

< Renewed (timid)

confidence, BTS plans

and consolidation

American Tower

SBA Communications

Grupo TorreSur

Telxius

Phoenix Tower do Brasil

AlfaSite

Big 4 MNOs

Other MNOs

Other independent towercos (CSS, Brazil Tower

Company et cetera)

Brazil - Estimated tower count 57,124

Source: TowerXchange

18872

841465001400

220

1655

16000

10003063

Argentina: highlights and growth 2015-18

< Tower inventory from 13k to 16k

< From untapped to overcrowded market?

< Then and now: is Argentina credit-worthy?

< Changes to permitting, fees, taxation a must for growth

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What happened in 2016-2017 in CALA

< Andean region opened up (but not as much as we predicted)

< ~8.6k towers sold in 2016/2017 of which 6.5k by MNOs

< ~13.9k towers built by towercos

< ~89k towers owned by towercos by end of 2017 (51.6%)

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The future of CALA towers

< Consolidation among towercos to continue

< Will BTS continue to recover

< New markets and sellers (Caribbean, Paraguay / Tigo, Digicel)

< Towercos expanding beyond steel and grass (fibre, IoT, data centres)

< Will more carriers carve out their own infracos?

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Thank you!

Arianna NeriManaging Director, Americas and Asia

TowerXchangeE. aneri@towerxchange.com

M. +39 338 111 2103W. www.towerxchange.com

Kieron Osmotherly,Founder and CEOTowerXchange

E. kosmotherly@towerxchange.comM. +44 7771 148001

W. www.towerxchange.com

Pablo CrespoHead of Research, Americas and Asia

TowerXchangeE. pablo.crespo@towerxchange.com

M. +44 (0) 7889 624128W. www.towerxchange.com

Meetup China 2018 27-28 September, Beijing

Meetup Africa 2018 9-10 October, Johannesburg

Meetup Asia 2018 4-5 December, Singapore

Meetup MENA 2019 29-30 January, Dubai

Meetup Europe 2019 2-3 April, London

Meetup Americas 2019 9-10 July, Boca Raton

Thank you and see you at the next Meetup!

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