Tower One Wireless (CSE: TO) (OTCQB: TOWTF)


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Tower One Wireless (CSE: TO) (OTCQB: TOWTF)

Tower One Wireless (CSE: TO) (OTCQB: TOWTF) builds, owns and leases a portfolio of wireless infrastructure assets to wireless carriers. The company is focused on 4G & 5G LTE infrastructure expansion primarily in Latin America. Based in Vancouver, Canada, the Company’s primary business is the leasing of space on communications sites to mobile network operators (“MNOs”) in countries it services with lease terms of over 10 years.

This stock used to be pumped hard, but management currently seems to be more focused on results than the stock price. In May of this year, Tower One Wireless was temporarily halted in Canada to allow for the dissemination of material information. Canadian securities officials are much different than US officials, so they imposed the halt because of regulatory concerns. The Ontario Securities Commission and the British Columbia Securities Commission both issued cease trade orders on the stock, which scares the daylights out of U.S. investors. A cease trade order is an order issued by a provincial Securities Commission against a company for failing to meet disclosure requirements, such as filing a quarterly or annual financial statement, or as a result of an enforcement action that involves an investigation of wrong doing. The order prohibits trading in that company's securities, but it is revoked when the company complies with regulatory requirements. All it means is that residents in the province where the cease trade order was issued are unable to trade in the securities of that company until the cease trade order is revoked. It has zero impact on U.S. investors and sometimes creates a buying opportunity, if the company is not a scam. Tower One Wireless Corp. rectified the default situation that gave rise to the suspension and was reinstated for trading on the Canadian Securities Exchange May 22, 2019.

Each tower is built with an initial anchor tenant commitment and space for an additional 1-3 tenants, or collocations. Tower One Wireless does not build any towers without an anchor tenant in place and the primary geographic focus is the largest Spanish speaking countries in Latin America: Argentina, Colombia and Mexico. These tower-related services include site acquisition, zoning and permitting, structural analysis, and construction which primarily supports the Company’s site leasing business, including the addition of new tenants and equipment on its sites. BTS is a process where a long-term lease is secured with a tenant prior to the construction of a tower. Terms are outlined in master lease agreements (“MLAs”) with tenants. Tower One Wireless has a total of 7 signed MLA agreements with major MNOs in Argentina, Colombia and Mexico and a total backlog of over 300 sites. In Argentina, the Company has executed MLAs with Claro Argentina, Telecom Argentina SA, and DirecTV. In Colombia, the Company had executed MLAs with Claro Colombia, Telefónica. In Mexico, the Company had executed MLAs with Altan Redes and AT&T Mexico.

The Telecommunications Tower Industry

The telecommunications tower industry leases different structure types (monopole, self-supporting, guyed, and rooftop) to MNOs to create a cell site. A cell site is an area within an MNO’s wireless network which is serviced by an antenna array. Tower One Wireless can host multiple MNO tenants on a single tower with marginal incremental cost. Each additional tenant is referred to as a “collocation.” The process of building a tower for an MNO starts with the MNO issuing “search rings” to the tower company. A search ring represents a radius around a specific global positioning system or “GPS” coordinate and a height requirement for the MNO. A cell site within this search ring is critical for the MNO to provide quality cellular coverage to its customers. Mostly due to the critical nature of the cell site’s location, little migration occurs among MNOs once a cell site is in place. After issuing a search ring, the Company looks for places to construct a tower. This process is called “site acquisition” and takes anywhere from 1 to 90 days. Following completion of the site acquisition process, or in many cases concurrently with completion, the Company seeks permitting from local authorities as well as the Aeronautica Civil (Colombia), ANAC (Argentina) or Directorate General of Civil Aviation (Mexico). The final step is construction of the tower, which typically takes less than 30 days. From start to finish, on average an individual MNO tower site takes approximately 180 days to be placed in service.

The process of site acquisition, permitting and construction are also outsourced to specialized third party companies that focus on these services. The Company has internal groups, including legal, site acquisition, engineering and construction supervision that supervise these areas and manage the time, quality and service received. Terms of the tenant lease are set forth in an MLA between the Company and tenant which include length of contract, rent by structure type, colocation rates and annual price increases to adjust for local inflation.

Tower Portfolio

On April 4, 2019, Tower One Wireless announced it had entered into a development agreement with a Third Party for Mexico and Colombia to develop 150 tower sites with total advances to date of approx. $1,800,000 USD. Tower One will handle all steps of completing the built to suit towers and the Third Party will have the right to purchase those sites at 15x Tower Cash Flow. The Company also said they had completed the sale of 23 towers from their Colombia operations to the Third Party. The company built the towers at a cost of approx. $900,000 USD and sold them for $2,600,000 USD at an average sale price of approx. $115,000 USD. Tower One Wireless has utilized the proceeds of the sale to complete additional towers in Argentina, Mexico and Colombia, as well debt repayment, general and administrative expenses.

See below for a summary of the Company’s tower portfolio: 


In Service Towers



Towers Under Construction







32 (23)

6 (4)









105 (23)

22 (4)



Products and Services

The Company’s revenue is primarily derived from tenant leases on the towers it owns and operates in Argentina, Colombia and Mexico. The lease terms of each structure type are outlined in the MLAs, and these agreements include information about lease amounts by structure type, annual increases and adjustments for local inflation, collocation terms, and minimum infrastructure design requirements. The lease payment amount depends on a number of factors including tower location, height and amount of equipment on the tower. Expenses at the tower site include insurance and maintenance expenses, and in certain cases, property taxes. Ground rent and power and fuel costs are passed through to the Company’s tenants. In the tower industry, tower level cash flow (“TCF”) is defined as leasing revenue from the tenants less the expenses at the tower site.

The Company’s operations are concentrated in Colombia, Argentina and Mexico. During the year ended December 31, 2018, the Company recorded total of revenues of $161,826, $240,622, $nil, and $904,714 in Colombia, Argentina, Mexico and the United States respectively, while the Company recorded total assets of $422,830, $6,953,232, $1,445,472 and $296 742, in Colombia, Argentina, Mexico and the United States respectively.

During the year ended December 31, 2017, the Company recorded total of revenues of $118,700, $65,061, $nil, and $16,737 in Colombia, Argentina, Mexico and the United States respectively, while the Company recorded total assets of $464,459, $2,637,063, $nil and $5,375, in Colombia, Argentina, Mexico and the United States respectively.

Overview of the Telecommunications Market in Latin America

Despite considerable progress in building out mobile broadband networks in Latin America over recent years (there are estimated to be over 160,000 towers in Latin America), approximately 10% of the population, or approximately 64 million people, still have no access to a mobile broadband network in the region. Latin America is characterized by densely populated and sprawling cities, but also by vast, sparsely populated areas, mountain ranges, rainforests and islands. Although most people live in urban or suburban areas, it is the small proportion of people living in rural areas (20% of the population) that are most likely to currently be without access to mobile broadband.

Although the business model utilized by mobile network operators has so far proven effective in expanding coverage to current levels, the Company believes that moving further into remote areas through traditional network deployment is a much greater challenge, owing to the sparsely populated unconnected areas, the difficult economic situation in many Latin American countries, the high cost of investment with limited potential for return, and a challenging market environment that often makes coverage expansion uneconomical. As a result, mobile network operators are increasingly adopting alternative methods, notably infrastructure sharing and partnerships with other ecosystem players, to complement traditional network deployments. In addition, they want to focus on their core business by deploying more cell sites and spending money on sales and marketing.

The Company believes that governments in the region want to make access to and use of mobile broadband universal, a goal shared by mobile network operators. The Company expects this will require a multidimensional approach and collaboration between governments and the mobile industry, with the former supporting industry-led initiatives with policies and programs that create the right incentives and an enabling environment for extending connectivity to underserved areas. The Company also believes that in many cases mobile network operators’ efforts to improve coverage are hampered by inefficient and arduous regulation from governments and policymakers, including onerous coverage obligations, strict quality-of-service (“QoS”) expectations, and restrictive planning laws around new infrastructure deployment which, together, make for a challenging regulatory environment. In many markets, this continues to be less of the case and as these markets mature they adopt many programs such as strict timelines for licensing and the utilization of government properties to enhance deployment speeds.

Additionally, of the 90% of the population of Latin America who have access to mobile broadband services, just over 160 million people, or approximately a quarter of the population, subscribed to such services. This means that three-quarters of the population do not currently subscribe to mobile broadband services, primarily due to affordability and/or consumer challenges.

Mobile network operators in Latin America face a tough balancing act in allocating capital across multiple divergent needs: investing in network expansion projects to meet coverage obligations, or boosting network capacity in existing service areas to address QoS expectations (most countries in Latin America have more than 3,500 users (subscribers) per cell site, compared to around 1,000 or fewer in the US and other developed markets). The Company believes that this puts an additional burden on mobile network operators and inadvertently weakens the business case for investment in coverage expansion. The Company believes that tower companies – like the Company – have a role to play in creating and sustaining an enabling environment for effective investment in infrastructure deployment for carriers and operators.

The Company’s infrastructure sharing is intended to enable mobile network operators to deploy networks more efficiently, optimize asset utilization and reduce operating costs compared with standalone deployment by the mobile network operator. It is also designed to minimize duplication of infrastructure, which has come under the spotlight in many countries due to growing environmental and public safety concerns.

The Focus Markets: Argentina, Colombia and Mexico

The Company operates in the three largest Spanish-speaking countries in Latin America: Argentina, Colombia and Mexico. The Company’s focus markets have an estimated total population of approximately 220 million people.

Tower One Wireless estimates there are currently over 60,000 tower sites in these markets with over 3,500 subscribers per tower. This figure differs substantially from the U.S. average of approximately 1,200 subscribers per cell site, which the Company believes points to the need for more towers in the region. Furthermore, the Company believes a key driver for further cell site growth in these markets is the substantial increase in mobile data consumption per user. Mobile data consumption per user in Latin America was 0.9 GB per month in 2016 and is projected to grow roughly 6 times that to 5.4 GB per month by 2021 per the GSMA Association (“GMSA”).

Demand Figures






Subscribers per Cell Site




approx. 3,600

approx. 1,200

Towers Sites





approx. 300,000

Annual Towers Needed






MNO CapEx (’16-’20)






Source: TowerXchange, GSMA, Management Estimates

The Argentine Market

Argentina has a population of 44 million and GDP per capita of approximately $26,910. There are an estimated 16,150 towers in Argentina as of October 2018 with approximately 3,777 subscribers per cell site, according to TowerXchange. The Company believes over 1,400 towers annually are needed in Argentina to meet demand and we believe that MNOs are planning to spend approximately $12 billion from 2016 through 2020 on capital expenditures, per GSMA. Major MNOs include Claro Argentina, Telecom Argentina SA and Telefonica. Claro and Telecom make up over 65% of the market and are tenants of the Company. The Company believes further demand drivers of future cell sites include Ente Nacional de Comunicaciones or “ENACOM’s recent spectrum auction and newly published guidelines to encourage telecom competition, Telecom’s commitment to invest $6.8 billion in Argentina by 2020, and the election of Mauricio Macri as the President of Argentina in 2015.

The Company believes that Argentina market has many positive characteristics with regard to its potential for tower companies – with three sizeable, competitive mobile operators vying for market share, high penetration yet potential for subscriber growth, and a burgeoning 4G mobile market. Significant tower infrastructure will be required to meet coverage targets and to cater to mobile data growth in large population centers. The latest political and economic events are still being assessed to understand the effects on the mobile operators’ tower construction growth.

The Colombian Market

Colombia has a population of 48 million and GDP per capita of approximately $18,850. There are 15,553 towers in Colombia as of October 2018 with approximately 3,626 subscribers per cell site, according to TowerXchange. The Company believes over 1,400 towers annually are needed in Colombia to meet demand and we believe that MNOs are planning to spend approximately $8 billion from 2016 through 2020 on capital expenditures, per GSMA. Major MNOs include Avantel, Claro Colombia, Telefonica and Tigo. The Company works with the four major carriers in Colombia and has MLAs with Telefonica, Claro, and Avantel. The Company has seven towers with Tigo, and is working on getting an MLA in place. The Company believes further demand drivers of future cell sites include a pro-infrastructure political climate, carrier LTE deployments and a planned network investment of over $300 million by Tigo.

The Mexican Market

Mexico has a population of 125 million and GDP per capita of $25,350. There are 30,349 towers in Mexico as of October 2018 with approximately 3,535 subscribers per cell site, according to TowerXchange. Management projects over 4,900 towers annually are needed in Mexico to meet demand and we believe that MNOs are planning to spend approximately C$14 billion from 2016 through 2020 on capital expenditures, per GSMA. Major MNOs include Altan Redes, AT&T Mexico, TelCel and Telefonica. Altan, AT&T and Telefonica make up over 30% of the market and are customers of the Company. The Company believes further demand drivers of future cell sites include a recent high-profile spectrum auction, a countrywide wholesale wireless broadband initiative by Altan and increased mobile data consumption.


Tower One Wireless operates in a very competitive industry. Competitors vary in size from small private organizations to large publicly-traded companies. The Company believes that price, network density, speed of service, access to capital, quality and site acquisition strategies are the primary competitive factors affecting companies in its industry. 

In Colombia, there are less than 12 tower companies; Argentina, less than eight tower companies; and Mexico, less than 18 tower companies. The Company believes there is ample room for its business to serve clients in these countries.


CSE Symbol: TO

Current Price: $0.047

Shares Outstanding:


Market Cap: $4.4 million

52 Week Trading Range:

52-Week Low: $0.035

52-Week High: $0.13

Corporate Offices:

Suite 600-535 Howe Street
Vancouver, BC V6C 2Z4

Phone: (917) 546-3016

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