MTN Nigeria has announced that its tower operations will be taken over by the Nigerian subsidiary of American Towers Corp. (ATC) starting in 2025. The decision comes after the expiration of the lease agreement between MTN and IHS Towers, which currently operates MTN’s 2,500 network sites. MTN cited ATC’s superior bid submission as the reason for selecting them as the preferred tower company for these sites.
This development comes amidst a boardroom battle between MTN Group and IHS Towers over MTN’s desire for greater control of the tower company. MTN Group currently holds a 26% stake in IHS Towers but controls only 20% of the voting share. In a deal completed in 2022, MTN acquired over 5,700 tower sites from IHS Towers in South Africa, further exacerbating the power struggle. MTN argued that its non-voting shares should be reflected in its voting power, but IHS expressed opposition to this proposal. Wendels, the second-largest shareholder in IHS Towers, sided with MTN, while other shareholders remained neutral.
This agreement with ATC will have significant implications for IHS Towers’ revenue, as Nigeria represents its largest market in terms of revenue and sales, with a significant portion derived from MTN. ATC is a major competitor of IHS Towers in Africa, alongside Eaton Towers and Helios Towers Africa. IHS Towers recently experienced a 9.4% decline in revenue compared to the first quarter of 2023, largely attributed to the devaluation of the naira. Similarly, MTN Nigeria reported a foreign exchange loss in its second-quarter report, resulting in a 64% decrease in profits for the period.
Overall, the shift in tower operations from IHS Towers to ATC Nigeria marks a significant change in the telecommunications landscape in Nigeria. As MTN Nigeria adapts to this new arrangement, it remains to be seen how this will impact the competitiveness of both ATC and IHS Towers, as well as the overall financial performance of these companies.
