InfoStride News reports that MTN Nigeria is currently engaged in the renegotiation of periodic reviews of its tower contracts. According to the telecom company, these renegotiations play a crucial role in mitigating the impact of forex liberalization and rising energy costs.
This information comes in the wake of MTN’s recent award of tower contracts to ATC, with the imminent renewal of an additional 1,500 site contracts on the horizon. The Chief Executive Officer of MTN Nigeria, Karl Toriola, shared insights into the importance of efficient tower contracts during the recent MTN Nigeria’s Capital Markets Day.
Toriola emphasized, “Efficient tower contracts are key in driving cost-effective, deep broadband penetration and leading technology across our operations. In our quest for 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. Beyond efficiency, we will also focus on cost optimization, green energy utilization, and sustainability.”
During the Capital Markets Day presentation, MTN Nigeria’s Chief Financial Officer, Modupe Kadri, provided a breakdown of the company’s tower business. Currently, IHS holds 14.6k sites (80 percent), while ATC has 2.3k sites (13 percent). In a highly competitive bidding process, 2.5k network sites under IHS portfolio, expiring in 2024 and 2025, have been awarded to ATC.
Kadri explained, “This will reduce IHS’ portfolio to 12.1k sites (66 percent) and increase ATC to 4.7k (26 percent) of the entire portfolio. The remaining IHS sites will expire between 2025 and 2029, with the majority in 2029. It is important to say that tower contract renegotiation, supported by disciplined capital allocation, is very important in mitigating the impact of forex liberalization and higher energy costs.”
Expressing optimism, the company declared excitement at the prospect of a liberal economic reform agenda for Nigeria, seeing it as an opportunity to unleash latent growth potential.
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