MTN Nigeria, the Lagos-based mobile network operator that is part of the South African MTN Group, confirmed its September contract award to move cell sites from 2,500 towers operated by IHS Towers (NYSE: IHS) to towers owned by American Tower’s (NYSE: AMT) ATC Nigeria subsidiary. The existing leases on IHS’s towers are due to expire in 2024 and 2025.
MTN claims the award resulted from what it deemed was a “very fair and transparent procurement process.” Terms were not disclosed. The MNO played down reports that IHS Towers had offered it improved terms to match the ATC bid. IHS Towers Chairman and CEO Sam Darwish said that these towers represent only a small fraction of IHS’s total tenancies but it is willing to match ATC’s terms, according to Reuters.
MTN Nigeria is the country’s largest MNO, according to Inside Towers Intelligence, with 77.6 million subscribers at the end of 3Q23 and covers over 90 percent of the country’s 220 million population. IHS Towers reported that it owned and operated 16,400 towers in Nigeria at the end of September, making it the largest tower company in the country. By comparison, American Tower reported it had 8,053 towers in Nigeria at the end of 3Q23. IHS claims that MTN has leases on 14,600 of its towers, representing roughly 80 percent of MTN’s cell sites, with the minor portion on ATC and other tower company sites.
IHS has been embroiled in a dispute with MTN Group, its largest shareholder, along with French financial investor Wendel and activist investor Blackwell Capital, over governance issues, Inside Towers reported. IHS says that it continues to engage with the parties over the issues.
“The agreement with ATC over the 2,500 sites is final, having gone through a rigorous process involving our highest governance approvals,” said Tobechukwu Okigbo, MTN Nigeria’s Chief Corporate Services and Sustainability Officer. “Our preference is always for bilateral renewal, subject to competitive pricing and terms. In this instance, the ATC proposal was superior.”
MTN says it will continue to “engage constructively” with IHS on further opportunities that arise, including lease renewals oncoming due in 2025, and expects that “IHS will present a compelling proposition.”
Okigbo dismissed suggestions that moving the sites to ATC towers would lead to network disruptions and have a negative environmental impact, expressing confidence in ATC’s plans for a smooth transition between tower companies.
Nonetheless, he says MTN expects ATC to adhere strictly to Nigerian Communications Commission guidelines and National Environmental Standards and Regulations Enforcement Agency regulations on deploying the sites.
“We are deeply committed to achieving net-zero emissions and part of the differentiated value ATC provides is a commitment to operating green sites, ensuring significant reduction in carbon emissions. Contrary to the allegations of harmful environmental impact, the partnership with ATC will reduce greenhouse gasses,” Okigbo emphasized.
By John Celentano, Inside Towers Business Editor
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