The International Finance Corp. (IFC) said it will assist the Communication and Renewable Energy Infrastructure (CREI) Phils Inc. in funding the construction of shared telecommunications towers across the country.
Jean-Marc Arbogast, IFC Philippines country manager, said on Thursday, Aug. 4, that the investment arm of the World Bank Group has arranged a $70 million, roughly P3.9 billion, financing package for CREI.
The financing package consisted of a $25.5 million (P1.4 billion) loan from IFC and a parallel facility of $44.5 million (P2.4 billion).
According to the IFC, its investment will allow CREI, a new tower company in the country, to fund the construction of over 600 new towers by next year, which will be shared under an open-access basis.
“Aside from creating a competitive market for tower colocations, the loan will help increase mobile network capacity, allowing operators to expand high-speed mobile networks (4G and 5G) across the country and offer better services at affordable rates,” IFC said in a statement.
According to the 2020 Global Digital Overview, the number of Internet users in the Philippines has more than tripled from 23 million in 2010 to 73 million by 2020.
Yet, the quality of mobile connectivity is inadequate given its pervasive network congestion. The country ranked 95th out of 142 countries for mobile Internet download speed.
Furthermore, the number of mobile subscribers per tower, a measure of network congestion, is more than double the regional average.
According to market estimates, to fill the gap, the Philippines would need a significant number of new towers built in the next seven to eight years to support the government’s network capacity requirements.
“Digital connectivity is more important than ever for businesses and people to thrive,” Arbogast said.
“By supporting the entry of a new company, IFC’s investment will contribute to a strong independent tower market in the Philippines, increasing competition, creating jobs, spurring economic growth and help cut emissions,” he added.
Kadri Hakim, CREI chief operating officer, said the tower firm was thrilled to be working alongside IFC in supporting the government of the Philippines’ development of its mobile infrastructure sector.
“Despite the challenging market conditions triggered by the pandemic, IFC’s long-term funding will allow us to meet our ambitions of expanding our digital infrastructure portfolio in the Philippines,” Hakim said.