MTN Nigeria Communications PLC has successfully renegotiated lease agreements with IHS (Nigeria) Limited, INT Towers Limited, and IHS Towers NG Limited (collectively IHS), as well as ATC Nigeria, covering approximately 2,500 telecom towers.
This development was disclosed in a notification to the Nigerian Exchange (NGX) Limited, signed by Uto Ukpanah, the company secretary, following an extraordinary general meeting (EGM) held on 30 April 2024.
The statement revealed that MTN Nigeria and IHS have reached new binding commercial terms under the existing infrastructure sharing and master lease agreements. The amendments are effective from 1 April 2024, with the contracts extended until 31 December 2032.
Prior to renegotiation, the site leases were set to expire between December 2024 and December 2029, with the majority ending in 2029.
“The revised terms substantially reduce the US dollar-indexed component of the leases linked to a discounted US consumer price index (CPI), making the leases majority naira-based, as well as set a cap for the naira CPI escalator component. They also remove technology-based pricing, allowing payments for new upgrades based on tower space and power,” the statement read.
The renegotiated agreements also incorporate an energy cost component indexed to the cost of providing diesel power, along with discounts and incentives over the contract’s lifespan. These changes aim to mitigate macroeconomic risks, support margin recovery, and resolve MTN Nigeria’s negative equity position.
Additionally, MTN Nigeria, ATC Nigeria Wireless Infrastructure Solutions Limited (ATC), and IHS have reached a mutual agreement concerning approximately 2,500 sites initially awarded to ATC from the IHS portfolio.
Following discussions that began in Q2 2024, the parties agreed to a revised allocation: ATC will provide tower services for up to 2,100 sites, while IHS will manage up to 1,400 sites. This includes 1,000 new MTN Nigeria sites to be rolled out in the coming years and allocated between the two tower operators.
MTN Nigeria’s CEO, Karl Toriola, expressed satisfaction with the agreements, stating, “We are pleased with the successful renegotiation of our tower lease agreements with IHS and ATC, which reflect 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 programme to improve our operating margins and capital position over the medium term.”
