TMT Online ObServer "TIGO Q1 aftermath: Stock closes positive, minor pus..."

Research evidence excerpt

TMT Online ObServer "TIGO Q1 aftermath: Stock closes positive, minor pus..."

acceleration was supported by a capital increase of MXN 2.88bn announced

during the quarter.

Brazil at the center of the expansion strategy: Brazil is SITES' largest market

(36% of consolidated tower lease revenues), added 432 of the 1,108 LTM site

additions, and contributed 91 of the 186 sites added in 1Q26. BNamericas

notes SITES' expansion strategy is concentrated particularly in Brazil and the

Andean region. Brazil tower lease revenues grew +15.9% YoY and +9.8% QoQ.

Gap to American Tower narrowing fast: At end-March, SITES had 37.6k sites

vs. American Tower's 46.9k in LatAm (9,323 gap). Over the past 12 months,

SITES added 1,108 sites while American Tower reduced its regional portfolio by

1,322. BNamericas estimates SITES could surpass American Tower as LatAm's

largest towerco around late 2029 or early 2030 at the current pace.

UBS's take: Slightly negative for TIM and TEF-BZ, neutral for AMX. SITES' investment

ramp, likely concentrated in Brazil, suggests BZ telcos are nearing the end of

digesting Oi mobile's tower assets, and combined with the 5G expansion, this could

push for new lease contracts. On lease outflows in an LTM basis, TIM was the best

performer (-2% YoY), while TEF-BZ and AMX BZ both posted +6-7% YoY (higher than

MSR), with TEF-BZ guiding leases to grow at or below MSR. We note that AMX may

have more room to negotiate lease contracts, as it is the controlling shareholder of

SITES. Overall, while telcos have levers to ease lease burdens (RAN sharing, higher

tenancy via colocation), lease cost per subscriber grew at a 5.8-9.5% CAGR over

2021-25 (above MSR), and we do not expect lease burdens to decelerate in the near

term (see our Q1 Lease Tracker).