Yesterday, MTN Nigeria, a division of Africa’s largest mobile network operator MTN Group, and IHS in Nigeria, a subsidiary of IHS Holding Limited (IHS Towers), one of the largest independent owners, operators, and developers of shared communications infrastructure in the world by tower count, announced an agreement to renew and extend all Nigerian tower Master Lease Agreements until December 2032, covering roughly 13,500 tenancy contracts.
Following the Extraordinary General Meeting (EGM) on April 30, 2024, MTN Nigeria Communications Plc hereby notifies the Nigerian Exchange Limited and the investing public that the company and IHS have successfully renegotiated binding commercial terms of the existing infrastructure sharing and master lease agreements.
This announcement was endorsed by Company Secretary at MTN Nigeria, Uto Ukpanah.
The statement went on to say that it was one of the plans presented at the EGM to aid in the telco’s capital position recovery.
“We are pleased with the successful renegotiation of our tower lease agreements with IHS and ATC, which reflect a collaborative and mutually beneficial outcome aligned with the long-term interests of all parties involved,” MTN Nigeria CEO Karl Toriola stated in response to the deals.
She continued “In keeping with our expenditure efficiency initiative, we believe that these changes will significantly reduce network costs, which will enhance our operating margins and capital position in the medium run.”
Chairman and CEO, IHS Towers, Sam Darwish, also said: “We are delighted to announce the renewal and extension of our agreement with our largest customer, MTN Nigeria. This marks a significant milestone for IHS Towers as it has completed the renewal of all tower MLA’s in Nigeria, a testament to the deepened relationship between the two companies. We are cognizant of the challenges faced in emerging markets and are proud to extend our relationship into the next decade, working together to navigate global and local macro conditions while broadening mobile connectivity in Nigeria through our critical infrastructure.”
IHS Towers will renew 1,430 leases (including additional collocations) in relation to the roughly 2,500 MTN Nigeria tenancies that were scheduled to expire at the end of 2024 and in 2025 under the revised terms.
A new diesel-linked component and new financial terms that offer what the parties consider to be a more sustainable split between local and foreign currency are included in the renewed and extended contracts.
The arrangement is evidence of the criticality of IHS Towers’ infrastructure and the strong operational links between IHS Towers and MTN, Nigeria’s largest mobile network operator, with about 79 million subscribers.
The new terms provide for the continuation of the USD component’s annual escalators linked to the US Consumer Price Index, the introduction of a new component indexed to the cost of providing diesel power as a hedge against FX fluctuations and diesel prices, and the continuation of the NGN component’s escalators linked to the Nigerian Consumer Price Index.
As a result of completing the renewal of every tower MLA in Nigeria, IHS Towers has reached a noteworthy milestone that attests to the strengthened partnership between the two businesses.
Commenting on the agreements, MTN Nigeria’s CEO, Karl Toriola, said: “We are pleased with the successful renegotiation of our tower lease agreements with IHS and ATC, which reflect a collaborative and mutually beneficial outcome aligned with the long-term interests of all parties involved. We anticipate that these amendments will unlock significant network cost efficiencies in line with our expense efficiency programme to improve our operating margins and capital position over the medium term.”
Chairman and CEO, IHS Towers, Sam Darwish, said: “We are delighted to announce the renewal and extension of our agreement with our largest customer, MTN Nigeria. This marks a significant milestone for IHS Towers as it has completed the renewal of all tower MLA’s in Nigeria, a testament to the deepened relationship between the two companies. We are cognizant of the challenges faced in emerging markets and are proud to extend our relationship into the next decade, working together to navigate global and local macro conditions while broadening mobile connectivity in Nigeria through our critical infrastructure.”
