- IHS Towers renewed its 13,500-site lease with MTN Nigeria until 2032, adjusting terms to tackle Nigeria’s economic challenges.
- The deal stabilises operations by linking payments to the naira and addressing fuel cost fluctuations.
OUR TAKE
IHS Towers’ lease renewal with MTN Nigeria marks a strategic adjustment to Nigeria’s challenging economic landscape. By sharing site management with ATC Nigeria, both companies are aiming to secure their positions in Africa’s telecom industry. This deal reflects the ongoing battle for market dominance amid rising operational costs and economic instability.
–Jasmine Zhang, BTW reporter
What happened
IHS Towers has renewed and extended leases with MTN Nigeria for 13,500 telecom sites until 2032. This agreement marks progress following economic challenges and strained relations. The new lease terms are adapted to the current economic climate, reducing the USD-indexed component and adding a diesel price index to mitigate risks.
Specifically, it is less tied to the US dollar and more dependent on the naira, which allows rents to fluctuate more in line with the local currency. A diesel price index has been added to the new lease terms, meaning rents can be adjusted according to changes in diesel prices. Keeping rents more in line with actual operating costs ensures that IHS Towers can operate even when fuel prices fluctuate.
Despite past tensions, including MTN’s decision to not renew 2,500 sites with IHS, this deal provides stability for both companies, with IHS retaining a significant portion of its tenancies and MTN better managing financial pressures in Nigeria.
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Why it’s important
IHS Towers’ lease renewal with MTN Nigeria reflects the intricate dance between economic survival and strategic positioning. Nigeria’s challenging economic environment, marked by currency devaluation and rising operational costs, has pressured both companies to rethink their strategies.
By adjusting lease terms and sharing site management with competitors like ATC Nigeria, IHS and MTN are not just securing their future but also reshaping the competitive landscape. This development underscores the intensifying battle for dominance in Africa’s evolving telecom market.
