Strategic Investment Analysis

Company Overview

Trilogy International Partners Inc. (TRL.TO) is a telecommunications company providing wireless voice and data services in New Zealand, Bolivia, and select international markets. Operating under the Viva brand in Bolivia, the company offers prepaid and postpaid plans, fixed broadband, and public telephony services. With a distribution network spanning company-owned stores, independent dealers, and retail partnerships, Trilogy serves an aggregate population of 16.8 million users. Headquartered in Bellevue, Washington, but listed on the Toronto Stock Exchange, Trilogy focuses on emerging and competitive telecom markets. Despite challenges in profitability, the company maintains a presence in niche markets with growth potential, particularly in Bolivia and New Zealand. Its diversified service portfolio includes mobile, fixed-line, and broadband solutions for both residential and enterprise customers.

Investment Summary

Trilogy International Partners presents a high-risk investment opportunity due to its negative net income (-$194.4M CAD in FY 2021) and significant debt burden ($851M CAD). While revenue remains stable ($653.6M CAD), the company operates in competitive and capital-intensive telecom markets, with exposure to emerging economies like Bolivia. The diluted EPS of -$2.88 and negative free cash flow (after capital expenditures) raise concerns about sustainability. However, its presence in underserved markets and a modest dividend ($0.06 per share) may appeal to speculative investors seeking exposure to niche telecom growth. Regulatory risks and currency fluctuations in Bolivia and New Zealand add further volatility.

Competitive Analysis

Trilogy International Partners operates in highly competitive telecom markets dominated by larger regional players. In Bolivia, its Viva brand competes with state-backed Entel and multinational Telefónica, limiting pricing power. In New Zealand, it faces well-established incumbents like Spark and Vodafone NZ, which benefit from greater scale and infrastructure. Trilogy’s competitive advantage lies in its targeted distribution networks (8,300 points in Bolivia, 2,500 in NZ) and prepaid-focused offerings for cost-sensitive users. However, its lack of scale compared to global telecom giants restricts investment in next-gen infrastructure like 5G. The company’s reliance on roaming revenue also exposes it to post-pandemic travel volatility. While its dual-market diversification mitigates country-specific risks, Trilogy lacks the financial flexibility to outspend rivals on network upgrades or marketing. Its survival hinges on operational efficiency and niche market retention.

Major Competitors

• Telefónica S.A. (TEF): Telefónica operates Movistar in Bolivia, directly competing with Trilogy’s Viva. Its global scale and financial resources allow aggressive pricing and infrastructure investment. However, it faces regulatory pressures in Latin America and high debt levels. Telefónica’s broader service portfolio (including fiber and OTT) gives it an edge over Trilogy’s narrower focus.
• Empresa Nacional de Telecomunicaciones S.A. (ENTEL.SN): Bolivia’s state-backed Entel dominates the local market with superior coverage and government support. It outperforms Trilogy in rural penetration but struggles with bureaucratic inefficiencies. Entel’s fixed-mobile convergence strategy pressures Trilogy’s standalone wireless model.
• Spark New Zealand Limited (SPK.NZ): Spark leads NZ’s telecom market with robust mobile and broadband infrastructure. Its 5G rollout and partnerships (e.g., Netflix) create a moat against smaller players like Trilogy. However, Spark’s premium pricing leaves room for Trilogy to target budget-conscious users.
• Vodafone Group Plc (VOD): Vodafone NZ (now owned by Infratil) competes with Trilogy in mobile services. Its global brand and IoT solutions attract enterprise clients, but Trilogy’s localized dealer networks retain strength in prepaid segments. Vodafone’s recent NZ divestment introduces uncertainty.