Investment opportunity in towerco in Argentina

The problem

Albright Capital Management was considering providing financing support to Innovattel/Torresec, which planned to be the first independent towerco to enter the Argentinean market, thus addressing the local demand for build-to-suit towers.

Analysys Mason was commissioned to assess the company’s business plan projections by developing its own independent forecasts for tenancy ratio and numbers of new towers, as well as reviewing key capex assumptions.

The solution

Based on a market study and primary research, we developed a bottom-up model to forecast the new sites required by each mobile operator in the market. Interviews were conducted with both the management and potential customers (e.g. mobile and FWA operators) in order to understand their roll-out plans and their attitude towards towercos. The forecast demand for sites was then translated into towers and tenancies for the target company and compared with its business plan assumptions. We also examined whether the capex per tower assumed in the plan was reasonable.

The result

Analysys Mason’s report provided Albright Capital Management with a detailed view of the tower market and a good understanding of the associated opportunities and risks. Our detailed quantitative analysis was used to support our client’s decision to close a USD45 million five-year term facility with the towerco to fund construction of the towers.