By Aduragbemi Omiyale
The tower lease agreement between HIS Nigeria and MTN Nigeria Communications Plc has been renewed and extended to December 2032.
This comes after both parties agreed to work together again after a slight disagreement, which led to MTN contracting another provider for its base stations in the country.
In a statement on Wednesday, IHS in Nigeria, a subsidiary of IHS Holding Limited, explained that with regards to the approximately 2,500 MTN Nigeria tenancies that had been due to expire at the end of 2024 and in 2025, only 1,430 tenancies, including new colocations, would be renewed by IHS Towers under the new terms.
It stated that the renewed and extended contracts include new financial terms that provide what the parties believe to be a more sustainable split between local and foreign currency, as well as a new diesel-linked component.
“We are delighted to announce the renewal and extension of our agreement with our largest customer, MTN Nigeria.
“This marks a significant milestone for IHS Towers as it has completed the renewal of all tower MLA’s in Nigeria, a testament to the deepened relationship between the two companies. We are cognizant of the challenges faced in emerging markets and are proud to extend our relationship into the next decade, working together to navigate global and local macro conditions while broadening mobile connectivity in Nigeria through our critical infrastructure,” the chief executive of HIS Towers, Mr Sam Darwish, said.
Also commenting in a notice filed to the Nigerian Exchange (NGX) Limited yesterday, the chief executive of MTN Nigeria, Mr Karl Toriola, said, “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.”
Business Post reports that MTN Nigeria is one of the biggest customers of HIS Towers and under the new arrangement, there is a USD component that will continue to benefit from annual escalators linked to the US Consumer Price Index, a NGN component that will benefit from escalators linked to Nigerian Consumer Price Index, and a new component indexed to the cost of providing diesel power, introduced to act as a hedge against diesel prices and FX fluctuations.
