MTN Nigeria renegotiates tower deal with IHS and ATC after a service revenue decline in Q1 2024. The agreement will cover over 13,500 tenancy contracts through December 2032, including renewing 1,430 MTN Nigeria tenancies. Out of these, 2,500 will expire at the end of 2024.
With a USD component linked to US computer price index, an NGN component linked to Nigerian computer price index and a new component catalogued to the cost of providing diesel power, this will act as a barricade against diesel prices and FX fluctuations.
This agreement comes amid the complete renewal of all Tower Master Lease Agreements (MLA’s) in Nigeria, which has solidified the relationship between the two countries.
See Also: MTN Exits One of its West African Markets
MTN has notified that the terms of renegotiating the agreement with IHS began April 1, 2024, and it will extend all existing contracts to December 31, 2032, with the leases expiring between December 2024 and December 2029.
Reasons for renegotiation by MTN Nigeria
The company emphasized that the renegotiated terms intend to mitigate macro risks, support margin recovery, and address its negative equity position. This agreement follows discussions that began in Q2 2024, prompted by a decline in service revenue in the first quarter of 2024.
In July 2024, for the H1 report, MTN Nigeria CEO Karl Toriola expressed confidence in the renegotiation deal with IHS Towers. He highlighted that MTN Nigeria had invested over $1 billion in initiatives and products aligned with national priorities and aimed at enriching lives. Toriola also noted progress in improving the company’s capital position, including regulated tariff increases and reducing USD exposure.
IHS Towers, one of the largest independent operators of shared communications infrastructure, has significantly impacted Nigeria since its establishment in 2001 by Sam Darwish. The company has over 20,000 towers globally, with 16,000 in Nigeria, and operates across Africa in countries including Brazil, Cameroon, Colombia, Côte d’Ivoire, Kuwait, Rwanda, South Africa, and Zambia.
In February 2024, IHS Towers renewed its agreement with Airtel, increasing its tenancies to nearly 10,000 over the next five years, including 2,500 collocations.
