IHS in Nigeria, a subsidiary of IHS Holding Limited (IHS Towers) and MTN Nigeria, today announced an agreement to renew and extend all Nigerian tower Master Lease Agreements until December 2032, covering approximately 13,500 tenancy contracts.
The shared communications infrastructure stated that these new terms also cover 1,430 tenancies (including new colocations) from the 2,500 MTN Nigeria tenancies that had been due to expire at the end of 2024.
Sam Darwish, chairman and chief executive officer of IHS Towers, said, “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 renewed and extended contracts include new financial terms that provide a sustainable split between local and foreign currency and a new diesel-linked component. In 2023, MTN Nigeria stated that it was renegotiating tower contracts to mitigate the impact of forex liberalisation and higher energy costs.
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The telco said this after it awarded ATC some of its tower contracts in IHS possession that were due to expire in 2024 and 2025. Karl Toriola, MTNN’s chief executive officer, explained this at the telco’s 2023 Capital Markets Day.
He said, “Efficient tower contracts are key in driving cost-effective, deep broadband penetration and leading technology across our operations, and in our quest of achieving differentiated value, we will from time to time review the contracts we have with our partners to ensure they optimally meet our site requirements.”
Modupe Kadri, MTNN’s Chief Financial Officer, added at the time, “It is important to say that tower contract renegotiation, supported by disciplined capital allocation is very important in mitigating the impact of forex liberalisation and higher energy costs.”
MTNN recorded a loss after tax of N137 billion due to foreign losses stemming from a June 2023 Central Bank of Nigeria (CBN) naira liberalisation move.
IHS stated that the newly agreed terms with MTNN include a dollar component that will continue to benefit from annual escalators linked to the US Consumer Price Index, a naira component that will benefit from escalators linked to the 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.
The infrastructure firm added that the new agreement with MTN is a testament to the deepened relationship between the two companies.
