Digicel to make $60m on sale of Myanmar telecom towers unit
Published 03/10/2015 | 02:30
Digicel has sold its 75pc interest in a telecoms infrastructure company in Myanmar.
Irish-owned Digicel will see a $60m (€53m) gain on the sale, according to papers filed with the US stock markets regulator.
The global media and telecoms business is currently in the process of raising an expected $1.8bn to $2bn through a share listing on the New York Stock Exchange.
The deal is expected to be the second-biggest US IPO this year, according to Bloomberg.
In a statement, Digicel said it had entered into a share purchase agreement with respect to the sale of its 75pc stake in Digicel Asian Holdings Pte Ltd, the parent of Digicel Myanmar Tower Company Limited (MTC), to the Edotco Group, a telecoms infrastructure business based in Malaysia.
The transaction is expected to close at the end of November and values the Digicel Myanmar Tower Company at $221m (€195m). According to a filing with US regulators, the net proceeds to Digicel total $120m, representing a gain to the business of $60m.
Commenting on the transaction, Digicel Group chief executive Colm Delves said: "The sale represents a strong return on our investment in Digicel Myanmar Tower Company and I would like to thank all the staff at MTC for their significant efforts over the past two years in making the company such a success."
Digicel made global headlines this week when it announced that it will become the first major telecoms network operator to implement new ad-blocking technology in what is a shot across the bow of internet companies.
The operator, which has mobile networks in 31 countries across the South Pacific and the Caribbean, is to deploy ad-blocking technology from Israeli company Shine. The service will start in Jamaica and roll out to Digicel's other markets in the Caribbean and South Pacific in the coming months.
Yesterday the Wall Street Journal reported that Germany's Deutsche Telekom is considering following suit.
"This is about giving customers the best experience and about getting access to broadband to the unconnected and allowing them to benefit from the opportunities it affords," Denis O'Brien said, when the ad-blocking move was announced.
"Companies like Google, Yahoo and Facebook talk a great game and take a lot of credit when it comes to pushing the idea of broadband for all.
"But they put no money in. Instead they unashamedly trade off the efforts and investments of network operators like Digicel to make money for themselves.
"That's unacceptable, and we as a network operator, are taking a stand against them to force them to put their hands in their pockets and play a real role in improving the opportunities for economic empowerment for the global population."
Ad-blocking software is popular among younger phone users in particular, with a recent report from Dublin start-up Pagefair estimating that 20pc of all internet browsing in Europe is now being affected by ad-blocking software.
"Digicel says it is looking to companies like Google, Yahoo and Facebook to "enter into revenue sharing agreements with it so that this money in turn can be reinvested in network deployment".
"Currently, these companies do not pay to make use of the network and the services they provide on it suck up bandwidth to make money for themselves through advertising while putting no money in," Digicel said in a statement.