Independent tower operator IHS Towers announced on Wednesday that its subsidiary in Nigeria has signed a deal with MTN Nigeria to renew and extend its tower master lease agreements until December 2032.
The deal between MTN Nigeria and IHS Nigeria covers approximately 13,500 tenancy contracts. It also includes the renewal of 1,430 tenancies (to include new colocations) that were due to expire at the end of 2024 and in 2025.
The latter tenancies were from a group of 2,500 towers that were at the heart of controversy in September 2023 when MTN Nigeria said American Tower Corporation (ATC) would take over operation of those towers next year when the contracts with IHS expired. Investor Blackwells Capital demanded that IHS chairman and CEO Sam Darwish resign over the news.
IHS responded with a counterbid in December, and while the terms weren’t disclosed at the time, the new bid was apparently enough to convince MTN Nigeria to let IHS continue to operate the majority of the towers.
On Wednesday, IHS Towers said the renewed and extended contracts include new financial terms, including a a USD component linked to US Consumer Price Index and a NGN (naira) component linked to Nigerian Consumer Price Index, which it says provides “a more sustainable split between local and foreign currency”.
The financial terms also include a new component indexed to the cost of providing diesel power, which IHS says will act as a hedge against diesel prices and foreign-exchange fluctuations – a key provision, as FX fluctuations in Nigeria resulted in heavy losses for IHS last year.
“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,” Darwish said in a statement. “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 Nigeria signed a similar deal with Airtel Nigeria in February, under which Airtel agreed to renew its contract and expand its tenancies to almost 10,000 over the next five years.
