Whatever your feelings about Brazillian President Jair Bolsonaro, his plan to increase total infrastructure investment through partnerships or privatization seems to be bearing fruit. The Brazil government’s plan to boost the economy through doubling investment in infrastructure to approximately $65 million has drawn some attention from companies sniffing out ways to pad out their bottom line.
Today we have Digital Colony Management, the digital infrastructure investment platform of Colony Capital (CLNY.NYSE), which announced their acquisition of infrastructure solution provider, Highline do Brasil II Infraestructura de Telecomunicações (Highline).
Highline’s portfolio includes wireless infrastructure assets, including macro towers, which span all the major urban, suburban and rural areas of Brazil. The company’s customer portfolio includes all of the major mobile network operators (MNO) in Brazil, including TIM, Vivo, Claro and Oi.
“We are thrilled to partner with Highline as we enter the Brazilian digital infrastructure market. The company has a best-in-class asset base, multiple avenues for growth, and a talented and strong management team well-versed in scaling a tower platform. As Brazilian MNOs increase their 4G coverage, seek to augment capacity in the country’s dense urban areas and prepare their networks for 5G deployment, there is a significant opportunity for Highline to grow,” said Steven Sonnenstein, managing director at Digital Colony.
Digital Colony’s focus is on the four key segments of mobile and internet infrastructure to take advantage of the convergence of physical infrastructure ahead of the 5G rollout. Digital Colony Management is the global digital infrastructure investment arm of Colony Capital. It was launched in 2018 by Digital Bridge Holdings and Colony Capital to combine Digital Bridge’s telecommunications and investment expertise with Colony Capital’s global scale and capital markets access.
Fernando Viotti will stay on as CEO of Highline, accompanied by his executive team, both of which saw the growth of the company from a startup into one of Brazil’s fastest-growing independent tower owners and operators.
“Whether considering how to alleviate current capacity overload or strategizing how to meet the network demands of 4G/5G adoption, IoT devices and overall subscriber usage, Brazilian MNOs have made macrosite location availability their top priority moving forward. Our partnership with Digital Colony will allow us to expand our services ‒ including our flagship BTS program ‒ to meet the growing infrastructure needs of the country’s MNOs, and offer new sites on which to deploy their equipment,” said Viotti.
South America is roughly five to seven years behind North America in terms of development, according to Sonnenstein. The company is banking on riding the cresting wave of that development in the coming years.
Brazil is one of the world’s most dangerous places
Whether or not the arrival of a sufficient law-and-order oriented strongman is enough to curtail some of Brazil’s greatest excesses is not up for debate. The stats aren’t in. We don’t know. Beyond a false sense of security, it’s doubtful.
Regardless, here are some crime statistics:
- In 2018, Brazil had a murder rate of 24.7 per 100,000 people. In 2017, Brazil had a murder rate of 29.2 per 100,000 population. There were a total of 56,101 murders in Brazil in 2017.
- According to Transparency International, corruption in Brazil is a pervasive social problem. Brazil scored 38 on the 2016 Corruption Perceptions Index, tying with India and Bosnia and Herzegovina, being ranked 76th among 175 countries.
- Express kidnappings, where individuals are abducted and forced to withdraw funds from ATM to secure their release, are common in major cities including Rio de Janeiro, São Paulo, Brasília, Curitiba, Porto Alegre, Salvador and Recife.
The greatest impediments to growth for a country like Brazil isn’t the crime rate. It’s enough to deter tourism, for sure, but tourism is only one course of an overall economic meal. Instead, government policies privileging established interests over competitive efficiency have contributed most to stagnation. Sound familiar? This includes excessive protectionism, regulation that discourages entry and blocks competition and a lack of public investment and incentives for private effort in scientific and technological development.
We all know Bolsonaro’s a racist, sexist, and a homophobe. We’ve seen the news reports. But in the case of protectionist policies keeping his country lagging behind the rest of the pack—he’s dead right. Digital Colony Management could easily be the beginning of a new wave.
—Joseph Morton