Asia Tea Time - Cup 39 ☕

This week I talk a big infrastructure deal in India, seeking out deals, and global elections.

Macro in Asia

American Tower sells its India mobile towers for US$2.5 billion

American Tower, a US-based mobile and wireless towers operator, has agreed to sell its India operations for US$2.5 billion.

The India business is American Tower’s biggest outside of the US and the company will be selling the assets to an infrastructure affiliate of Canadian giant Brookfield Asset Management.

Why it’s happening

• India’s market is notoriously difficult to navigate for foreign businesses. American Tower has been mulling selling its India business after top client – Vodafone Idea – has run into trouble. 

• Vodafone Idea, one of the big three mobile and wireless providers in India, has failed to pay dues that it owes American Tower. No surprises, then, that it wants to bail and focus on the profitable scale it has in its home market.

Why it matters

• As the world’s most populous market, India is a massive market in more ways than one. Digital infrastructure in India, driven by a surge in mobile connectivity and engagement, is spurring a massive buildout of mobile towers. 

• Brookfield, a Canadian asset manager that invests in physical infrastructure (from real estate to data centres and ports), already has a strong presence in the India mobile tower market through its various listed subsidiaries. 

• India’s economy is expected to grow by 6.2% in 2024, making it one of the fastest-growing large economies in Asia.

What’s next?

• Watch out for where the Indian stock market goes next given it’s just had a barnstorming 2023, up around 20%. 

Tim’s Take 

The deal for American Tower’s Indian mobile towers show how attractive the physical infrastructure story is in India.

Brookfield, which has a reputation for being a prudent deal maker, will become the largest telecoms tower operator in India after the deal is completed, adding American Tower’s 77,000 towers to the 157,000 it already operates. 

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It’s also an interesting sign of how investors are assessing the Indian opportunity. Clearly, the market is one that is set up for extraordinary growth for this decade.

Yet, to be profitable in physical infrastructure in India, the normal rules apply – you must have both scale and financial firepower. Fortunately, Brookfield has both.

Brookfield’s own listed entities, which includes Brookfield Infrastructure Partners (NYSE: BIPC) (NYSE: BIP), are popular with institutional investors looking to cash in on the global demand for infrastructure.

In Asia, the opportunity is compelling. In India, the amount of money needed is astounding. According to a World Bank report, India will need to invest around US$840 billion over the next 15 years into urban infrastructure to meet the demand of its population.

That works out to be around US$55 billion per year. Infrastructure like mobile towers will form just one part of that growth story.

As attention shifts away from China, towards the next Asian growth story, it seems India has attracted the most investors.

Tim's Money Tip of the Week

We’re always on the lookout to save money but it’s even more important now when prices are rising as fast as they are.

So, if we’re online doing any shopping and you need to purchase something, it’s always worth checking Google for a quick “promo code” search to see if you can nab a quick promo code.

It might not be forthcoming for sites likes Shopee, Amazon or Lazada but if you’re buying something off a lesser-known site, there’ll usually be a promo code of some sort – either for a first-time purchaser or if you just subscribe to their mailing list.

Either way, we can catch deals if we are willing to put in a little detective work. Take FoodPanda for example.

Food delivery isn’t cheap but the food delivery platform is offering monthly promo codes (that give you $8 off) for all major credit card users in Singapore – as long as you spend S$38. 

They don’t market it actively but if you just use Google, you can find a dedicated page where all the promo codes are listed.

Next time you’re online and about to tap “buy”, think about whether you’ve gotten the best deal you can. 

Story of the Week

We enter 2024 with the prospect of over 60 national elections worldwide, with some of the biggest democracies in the world heading to the polls.

Watch out in particular for the obvious big one – the US – as well as India, Indonesia, and Taiwan.

The last one is set to be particularly relevant to how the geopolitical landscape looks in Asia over the short term.

We won’t have to wait long. Taiwan’s electorate get their chance to vote in less than 10 days, with the Taiwanese Presidential election taking place on 13 January.