By Milcah Tanimu
IHS Towers, Africa’s leading telecom tower company, has renewed and extended its leases on 13,500 sites with its largest customer, MTN Nigeria, until 2032. This agreement marks a significant move towards stabilizing operations in Nigeria, a country currently grappling with economic turbulence, including naira devaluation and soaring diesel prices.
The revised agreement not only extends the existing leases but also adjusts financial terms to better align with the current economic climate. The leases will now be predominantly naira-linked, with a reduction in the USD-indexed component, and a diesel price index has been introduced to manage fuel cost fluctuations. These changes aim to mitigate the macroeconomic risks that have impacted both IHS Towers and MTN Nigeria in recent years.
This renewal follows a period of strained relations between the two companies. In 2023, MTN, which holds a 26% stake in IHS, sought more influence on the board—a move that IHS rejected to maintain neutrality. Additionally, MTN chose not to renew contracts on 2,500 sites with IHS, opting instead for ATC Nigeria, a subsidiary of American Tower, due to a better bid. This decision led to a decline in IHS Towers’ shares, affecting MTN’s market capitalization.
The latest agreement revises the allocation of the previously contested 2,500 sites, with ATC Nigeria managing around 2,100 sites and IHS overseeing 1,430, including 1,000 new sites to be developed. This compromise allows IHS to retain a significant portion of its tenancies, while MTN gains much-needed stability in its largest market, where rising operational costs have been a concern.
For ATC Nigeria, although it lost some tenancies, the company benefits from managing less capital-intensive sites, allowing it to focus resources on other clients, such as Airtel.