Summary

  • A tower portfolio sale transfers assets; the master lease separately assigns diesel price, consumption, electricity, maintenance, security, ground access and uptime consequences.
  • A diesel-linked fee can hedge a unit-price movement without transferring excess litres or operating failure. The buyer and seller need a site-level responsibility ledger.

Put the sale proceeds in one column and the next month's site-power bill in another. The first column may show a clean capital release. The second contains grid electricity, diesel, haulage, batteries, generator maintenance, security, site access and service credits. The economic result depends on which party owns each line after closing.

This is why “asset-light” can be an incomplete description of a tower transaction. The mobile operator may stop owning the passive structure yet continue paying a long-term lease. The tower company may buy the fuel and run the generator, but a price index can return part of the commodity shock to the tenant. A pass-through can reimburse an invoice without deciding who bears inefficient consumption or a failed service level.

The filing separates ownership from operation

IHS Towers says it has historically expanded through new construction and acquisitions of portfolios from mobile-network operators and independent tower companies. At the end of 2025 it reported 33,663 owned towers and another 3,927 operated under master land lease and right-of-use arrangements.

The associated customer commitment is long. IHS says its master lease agreements typically run for five to ten years. Key customers represented 93% of tenants; their average remaining master-lease term was 6.4 years, with $11.1 billion of aggregate contracted revenue.

Those figures establish duration and concentration, not the economics of any single site. The filing also shows that ownership, lease revenue and power responsibility are separate layers. Some contracts include power indexation or power pass-through; others do not.

An index covers a variable, not the whole system

IHS describes a power-indexation clause as adjusting a portion of the monthly lease fee when diesel or electricity prices move beyond an agreed base. A power pass-through can send utility electricity cost to the customer. The mechanism differs by agreement.

For 2025, 23% of continuing-operations revenue was linked to power indexation or pass-through. Yet power generation—including diesel, haulage and minimal electricity—was 47.8% of cost of sales. IHS warns that only a component of site fuel cost can be passed through under certain contracts, while other leases lack the protection.

The distinction is practical. A diesel index can respond to the price per litre. It does not, without additional terms, establish the efficient number of litres for a site, the allowed generator hours, the treatment of losses, the maintenance standard or the evidence needed before reimbursement.

Nigeria and South Africa show different allocations

IHS says renewed MTN Nigeria contracts added a diesel-linked component, reducing its exposure to diesel-price fluctuations. The filing does not publish the confidential formula, its lag, caps, volume baseline or site reconciliation.

South Africa is described differently. After a power Managed Services agreement with MTN South Africa was unwound, IHS South Africa was no longer responsible for diesel or alternative power; electricity cost was fully passed through. One arrangement reduces price exposure while leaving IHS in the power chain. The other removes a stated supply responsibility.

Treating those structures as equivalent would obscure the decision. The relevant question is not whether a lease contains the word “power,” but which party buys energy, controls equipment, verifies consumption, funds efficiency and pays when availability falls short.

The responsibility ledger needs more than fuel

IHS lists diesel, site maintenance and security among primary operating expenses. It is investing in grid connections, batteries, solar and hybrid systems to reduce consumption, while warning that savings efforts may not always succeed. An index that reimburses more expensive diesel can weaken the tenant's visibility into the capital alternative unless efficiency data travel with the bill.

Ground access is another layer. IHS says about 89% of sites operate on leased land and about 14% of ground leases were due for renewal within 24 months. Failure to renew can force dismantling or relocation. Selling the tower therefore does not eliminate the location contract beneath it.

A credible post-sale ledger assigns at least six items: energy unit price; energy volume; power-system capex and maintenance; theft and security loss; uptime credits or penalties; and ground-lease renewal or relocation. Each item needs an owner, evidence source, reconciliation interval and remedy.

The test is deliberately narrower than a claim that outsourcing is good or bad. A tower company may lower cost through scale, shared tenancy and specialist operations. The MNO may receive useful capital and better service. The benefit is proven only when sale proceeds and recurring liabilities are evaluated together, with the residual risks named rather than buried inside a blended lease rate.

Sources