MTN Nigeria Renegotiates Tower Lease Agreements with IHS and ATC

Strategic Renegotiations with IHS Nigeria, ATC, and INT Towers Strengthen Operational Stability.

Highlights

  • The new agreements extend leases to December 31, 2032, with significant cost-saving measures.
  • Technology-based pricing removed; new terms include energy cost components linked to diesel prices.
  • MTN Nigeria serves approximately 79 million subscribers.

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MTN Nigeria Renegotiates Tower Lease Agreements with IHS and ATC
MTN Nigeria Communications has successfully renegotiated its tower lease agreements with IHS Nigeria, INT Towers, IHS Towers NG (together, IHS), and ATC Nigeria, securing terms that bolster the company's financial and operational stability. MTN Nigeria announced in an exchange filing on August 7 that the company and IHS have renegotiated the commercial terms of their existing infrastructure-sharing and master lease agreements.

Also Read: MTN Nigeria Selects ATC Nigeria for Tower Services as Contracts Near Expiry




Key Changes in Lease Terms and Conditions

The agreement with IHS Nigeria renews and extends all Nigerian tower master lease agreements, including approximately 13,500 tenancy contracts. Regarding the approximately 2,500 MTN Nigeria tenancies set to expire at the end of 2024 and in 2025, IHS Towers will renew 1,430 tenancies (including new colocations), IHS said.

Effective April 1, 2024, the revised contracts extend the existing agreements to December 31, 2032. Prior to the renegotiation, the site leases were set to expire at various times between December 2024 and December 2029, with the majority expiring in 2029.

Key changes include reducing the US dollar-indexed component of the leases, shifting them to be predominantly naira-based, and capping the naira CPI escalator. Additionally, technology-based pricing has been removed, with new upgrade payments now tied to tower space and power usage. The renegotiated terms also introduce an energy cost component linked to diesel prices, alongside built-in discounts and incentives over the contract period, the official release said.

Also Read: MTN Nigeria and ATC Africa Sign Sustainable Agreement to Boost Connectivity

New Allocation of Tower Sites with ATC and IHS

In a related development, MTN Nigeria, ATC, and IHS reached a mutual agreement on the allocation of approximately 2,500 tower sites that were awarded to ATC from the IHS portfolio, as per a September 2023 announcement. ATC will now manage up to 2,100 sites, while IHS will oversee up to 1,400 sites, including 1,000 new sites that MTN Nigeria plans to roll out over the coming years.

Commenting on the agreements, MTN Nigeria said: "We are pleased with the successful renegotiation of our tower lease agreements with IHS and ATC, which reflects 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 program to improve our operating margins and capital position over the medium term."

Also Read: MTN Nigeria Launches First Fully Digitised Self-Service Retail Store

MTN Nigeria serves approximately 79 million subscribers. IHS Towers has nearly 40,000 towers across its 10 markets, including Brazil, Cameroon, Colombia, Cote d'Ivoire, Egypt, Kuwait, Nigeria, Rwanda, South Africa, and Zambia.

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Telecom Analyst

Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

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