LIBERTY LATIN AMERICA COMPLETES ACQUISITION OF ECHOSTAR’S MOBILE SPECTRUM AND PRE-PAID SUBSCRIBERS IN PUERTO RICO AND THE USVI

Rhea-AI Summary

Liberty Latin America (NASDAQ: LILA and LILAK) has completed the acquisition of EchoStar's spectrum assets and approximately 85,000 pre-paid mobile subscribers in Puerto Rico and the USVI for $255 million. The deal, approved by regulatory authorities, aims to enhance competition in the region. The payment will be made in four annual installments, with the first $95 million paid at closing. Liberty Latin America plans to fund the transaction through local liquidity sources.

CEO Balan Nair emphasized the company's commitment to Puerto Rico and the USVI, highlighting the acquisition of over 100 MHz of spectrum and an extensive distribution network. This move is expected to drive fixed-mobile convergence penetration from current levels of around 25%, increase capacity, boost speeds, strengthen the 5G mobile network, and expand the company's presence in the prepaid market.

Positive

• Acquisition of over 100 MHz of spectrum and 85,000 pre-paid subscribers
• Potential to drive fixed-mobile convergence penetration from 25%
• Opportunity to increase capacity, speeds, and strengthen 5G network
• Expansion in the prepaid market
• Acquisition expected to enhance competition in Puerto Rico and USVI

Negative

• Total acquisition cost of $255 million to be paid in installments
• Potential financial strain due to multiple payment installments

Insights

Financial Analyst

The $255 million acquisition of EchoStar's spectrum assets and pre-paid subscribers by Liberty Latin America is a strategic move to enhance its market position in Puerto Rico and the USVI. The $95 million initial payment, with the remainder spread over four years, allows for financial flexibility. This deal is expected to boost Liberty's competitive edge in the region, particularly in the 5G and prepaid markets.

The acquisition of over 100 MHz of spectrum and 85,000 pre-paid subscribers provides Liberty with immediate scale and infrastructure to expand its services. The potential to increase fixed-mobile convergence penetration from 25% suggests significant revenue growth opportunities. However, investors should monitor the company's ability to integrate these assets effectively and capitalize on the expected synergies.

Telecom Industry Expert

This acquisition marks a significant shift in the competitive landscape of Puerto Rico and the USVI's telecom market. The addition of substantial spectrum assets will enable Liberty Latin America to enhance its 5G capabilities, potentially leapfrogging competitors in network quality and coverage. The 85,000 pre-paid subscribers also provide an immediate boost to Liberty's market share in a segment that often serves as an entry point for price-sensitive customers.

The extensive distribution network acquired is a key asset, offering Liberty increased visibility and customer touchpoints. This could lead to reduced customer acquisition costs and improved market penetration. The challenge lies in effectively integrating these assets and leveraging them to drive growth in both prepaid and postpaid segments while managing potential regulatory scrutiny in a consolidating market.

DENVER, Colorado--(BUSINESS WIRE)-- Liberty Latin America Ltd. (“Liberty Latin America” or the “Company”) (NASDAQ: LILA and LILAK, OTC Link: LILAB) announced today that it has closed the transaction to acquire EchoStar’s (SATS) spectrum assets in Puerto Rico and the USVI as well as approximately 85,000 pre-paid mobile subscribers. This follows a review by the United States Department of Justice Antitrust Division and the approval by the Federal Communications Commission, which noted in its approval on August 9, 2024, that public interest benefits are likely to be realized as a result of the transaction, such as enhanced competition in Puerto Rico and the USVI.

The aggregate asset purchase price of $255 million will be paid in four annual installments commencing on the closing date, with the first installment of $95 million having been paid today. Liberty Latin America expects to fund the transaction through local liquidity sources, including cash on hand, cash generated from operations, and/or revolving credit facilities.

Commenting on the acquisition, Balan Nair, President and CEO of Liberty Latin America, said, “Our strong commitment to Puerto Rico and the USVI is reflected in this deal. By acquiring over 100 MHz of spectrum, approximately 85,000 pre-paid subscribers, and an extensive distribution network we have a tremendous opportunity to leverage our full-service products to drive fixed-mobile convergence penetration from current levels of around 25%. As we ramp up our commercial efforts, there is significant room for growth, and these assets will enable us to add more capacity, increase speeds, further strengthen our 5G mobile network, and grow our scale in the prepaid market.”

ABOUT LIBERTY LATIN AMERICA

Liberty Latin America is a leading communications company operating in over 20 countries across Latin America and the Caribbean under the consumer brands BTC, Flow, Liberty and Más Móvil, and through ClaroVTR, our joint venture in Chile. The communications and entertainment services that we offer to our residential and business customers in the region include digital video, broadband internet, telephony, and mobile services. Our business products and services include enterprise-grade connectivity, data center, hosting and managed solutions, as well as information technology solutions with customers ranging from small and medium enterprises to international companies and governmental agencies. In addition, Liberty Latin America operates a subsea and terrestrial fiber optic cable network that connects approximately 40 markets in the region.

Liberty Latin America has three separate classes of common shares, which are traded on the NASDAQ Global Select Market under the symbols “LILA” (Class A) and “LILAK” (Class C), and on the OTC link under the symbol “LILAB” (Class B).

For more information, please visit www.lla.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240903069012/en/

Investor Relations:

Kunal Patel: ir@lla.com

Media Relations:

Kim Larson: llacommunications@lla.com

Source: Liberty Latin America Ltd.

FAQ

What assets did Liberty Latin America acquire from EchoStar in Puerto Rico and USVI?

Liberty Latin America acquired over 100 MHz of spectrum, approximately 85,000 pre-paid mobile subscribers, and an extensive distribution network from EchoStar in Puerto Rico and the USVI.

How much did Liberty Latin America pay for the EchoStar assets?

The aggregate asset purchase price is $255 million, to be paid in four annual installments. The first installment of $95 million was paid at closing.

How does Liberty Latin America plan to fund the EchoStar asset acquisition?

Liberty Latin America expects to fund the transaction through local liquidity sources, including cash on hand, cash generated from operations, and/or revolving credit facilities.

What is the current fixed-mobile convergence penetration level for Liberty Latin America in Puerto Rico and USVI?

The current fixed-mobile convergence penetration level is around 25%, with Liberty Latin America seeing significant room for growth following the acquisition.

How will the EchoStar asset acquisition affect Liberty Latin America's 5G network?

The acquisition is expected to enable Liberty Latin America to add more capacity, increase speeds, and further strengthen its 5G mobile network in Puerto Rico and the USVI.