MTN’s dissatisfaction with IHS Towers’ governance possibly entering a new phase
MTN Nigeria has revealed its tower operations will be run by the Nigerian subsidiary of American Tower Corporation (ATC) from 2025, replacing current operator IHS Towers.
The announcement, made in a stock exchange filing, means ATC will take over 2,500 of its network sites from IHS Towers’ local subsidiary starting in 2025, following the expiry of the lease agreement with its current provider in 2024 and 2025 – which has worked with the operator since 2014 when IHS took over more than 9000 towers.
MTN said ATC was “selected as the preferred tower company for those sites based on its superior bid submission” after a review of the bids received for the tower contract.
Although MTN cited portfolio diversification and “proactive initiatives to renegotiate tower agreements”, the move was interpreted as a shot across the bows for IHS, following recent dissent from the towerco’s largest investors including MTN, Wendel and Blackwells over governance and a lack of transparency.
MTN’s issues stemmed from IHS Towers’ decision to reportedly cap MTN’s voting rights at 20%. The telco had said that it could not sell its non-voting shares and wanted its stake in the company to be reflected in its voting power. In 2022, the tower company acquired 5,701 towers from MTN. However, MTN owns 26% of IHS Towers through its subsidiary Mobile Telephone Networks (Netherlands).
Last month, MTN Group CEO Ralph Mupita pretty much signalled the telco was no longer thinking of selling up its IHS and would instead take a more strategic view of its investment as it seeks to continue with its group-wide asset realisation deleveraging plans.
Timing not great for IHS
The switch comes at a bad time for IHS which recently reported losses widening to $1.25bn compared to $178.6m in the same period last year – impacted primarily by an increase in net finance costs driven by Nigeria’s currency devaluation.
The towerco cut its full-year revenue outlook and now expects revenue in the range of $2.08-2.11bn, down from the previous outlook of $2.19-2.22bn.
MTN’s new agreement with ATC could seriously impact IHS Tower’s revenue. According to Techcabal, Nigeria is IHS’s biggest market by revenue and sales, much of which was from MTN.
According to its website, ATC Nigeria is currently managing around 7,700 sites in the country.
MTN nabs long distance licence in Nigeria
Bayobab, the new brand for MTN GlobalConnect, has obtained a national long distance operator licence from the Nigerian Communications Commission (NCC).
“This licence demonstrates our commitment to providing seamless and advanced connectivity solutions to our customers and partners. We believe connectivity is the foundation on which innovation thrives, and our unwavering dedication to excellence and innovation will continue to guide us as we begin this new chapter of delivering next-generation digital connectivity across Nigeria,” said Bayobab president and CEO Frédéric Schepens.