MTEL - Acquires EXCL towers

MTEL - Acquires EXCL towers As many as 54 towers of XL Axiata (EXCL) have been acquired by Dayamitra Telekomunikasi (MTEL), 53 of which will be leased back to the earlier. Through buy and lease back agreement, the total transaction is worth IDR36.6 bn. (Source: Investor) Comment: In terms of size, the transaction was much smaller than those involving ISAT in 1Q23, which is priced at IDR1.65bn/tower. The undemanding price could mostly be due to them being a single tenant, in our view. Though considered to be less significant in value, the transaction marks a continuous shift in telco-tower business where MNOs are aspired to be asset-light companies amidst pressure on more efficiency and lean balance sheet. The shift also results in fewer tower ownership of MNOs in the last few years. In the future, we expect that asset divestment will also involve not only tower as the main MNOs infrastructure asset, but also other supporting infrastructure, including fiber. We retain our BUY call on MTEL with blended target price of IDR870/share, reflecting 11.5 EV/EBITDA.