Tower One Wireless (TO.V) made a significant move to broaden its share of the South American wireless market when the company announced today that it had formed a wholly-owned Argentinian subsidiary.
According to the news release, the company, a provider of cellular network solutions focusing on the South American market, has taken control of all assets, trade secrets and receivables of Rojo Resources (RJ.V).
Rojo has been talking about making a shift in business for a while now and has been exploring possibilities within the burgeoning Argentinian cellular market.
And by ‘burgeoning’, I mean explosive. The GSMA, a worldwide association of mobile service providers which formed in 1982, stated that smartphones represented 32% of all phone connections in Latin America throughout 2014.
That ratio is expected to more than double to 68% by 2020. In short, this trend is anticipated to put a smartphone in the hands of 605.0 million South American users.
However, for that kind of phenomenal growth to be realized, there needs to be an investment in infrastructure.
Sergio Costa Sant’Anna, a well-regarded lecturer in International Business Law from the IESE Business School, University of Navarra, made no bones about how he felt regarding the successful spread of 4G connectivity in Latin America, “[They] can only can only become a reality if there is an increase in investments in infrastructure on the part of governments and [local] service providers.”
Tower One Wireless’ mandate fits nicely within this paradigm.
The company currently operates through its other wholly-owned subsidiary, Tower Three SAS, a privately-held LLC based in Colombia.
Tower Three’s focus is on constructing and operating towers in municipalities where there is limited or no cellular coverage.
Tower Three offers a cost-effective 4G LTE infrastructure expansion tool for both local and international providers within the country.
So just why is everybody so convinced that South America will soon be second only to the Asia Pacific Region in terms of wireless connectivity?
For one simple reason, they have no choice.
Don’t underestimate the power and necessity of the wireless communication revolution. It was the pony express and then the railroad that formed and maintained an early post-colonial America.
The propagation of wireless cellular network connectivity not only powers democracy in developing countries, but it also empowers the economy.
Sant’Anna is a firm believer in this idea, “Telephone networks play a crucial role in the integration of a country, and as a result, in the generation of new businesses.”
Emerging 21st century economies in the likes of Latin America, India and the Asia Pacific Region will be built on 21st century connectivity and commerce.
First movers in this space have the unique opportunity of forming the long-lasting local relationships that a post-globalized Latin America demands.
Tower One also operates under belief that the company’s bottom line is built on three values: social equity, economic success and environmental awareness.
Today’s announcement provides more evidence of Tower One’s ability to execute on its mandate. Keep your eye out for more news.
Do your due diligence before making any investment decision.
–Gaalen Engen
http://twitter.com/gaalenengen
FULL DISCLOSURE: Tower One Wireless is NOT an EQUITY.GURU client.