MTN and IHS Agree Landmark Mobile Tower Outsourcing Agreement in Nigeria

MTN has reached an agreement in principle with IHS Holding Limited (IHS) for the transfer of its towers business, comprising of up to 9,151 of the company’s mobile network towers in the country.

The agreement was pushed through in line with continued efforts to raise service levels for customers within Nigeria and, as part of the transaction, the towers will be transferred to a new company which will be joint-owned by MTN and IHS, with the latter having full operational control of the underlying business.

The new towers company will market independent infrastructure sharing services to other mobile operators and Internet Service Providers (ISPs) in Nigeria. The transaction is expected to close in Q4 2014.

“We are delighted to have entered into a further transfer transaction with IHS, in our largest African market,” said Sifiso Dabengwa, Group President and CEO of MTN Group.

“IHS’s deep knowledge and considerable experience in the sector will help drive efficiencies and enhance our network uptime, allowing us to concentrate on further raising our own service levels, improving the customer experience and ensuring we remain the number one operator in Nigeria.”

This is the ninth tower transaction for IHS and its fifth with MTN following the transactions in Cote d’Ivoire, Cameroon, Rwanda and Zambia that took place in 2012 and 2013.  On completion of this transaction, IHS will manage over 20,000 towers in Africa.

“This is a significant and transformational agreement for IHS that doubles the size of our business and confirms our position as the leading mobile infrastructure company in Africa,” Issam Darwish, CEO of IHS Holdings, said. “It gives me great pleasure to be agreeing this deal with MTN, a partner we have worked with for more than ten years and with whom we have an excellent relationship. 

I am confident that MTN’s customers and management will benefit almost immediately from IHS’s focus on quality of service, innovative tower management and sustainable energy approach.”

As part of the deal, the new towers company has committed more than US$500 million of additional investment over four years into tower upgrades and a maintenance programme to improve quality of service and enhance the customer experience on the MTN Nigeria network. 

In addition, further investments will be made into IHS’s centralised Network Operations Centre (NOC) in Nigeria to optimise operations and increase the company’s market leading network uptimes of over 99 percent.

There will also be sustained investments in energy efficiency through the deployment of advanced generators, batteries and alternative power solutions to reduce diesel consumption. IHS anticipates creating a considerable number of technical and engineering direct and indirect employment opportunities to be sourced locally in Nigeria.

Michael Ikpoki, MTN Nigeria CEO concluded: “The separation of MTN Nigeria’s mobile network towers and operation of the underlying towers business by IHS reflects a major part of our strategy to optimise network quality and technological assets towards creating value and driving innovation to meet our customers’ needs now and in the long term.

“Indeed, the trends and realities in our industry reveal the increased role of cost efficiency and optimisation of assets in guiding business decisions in order to remain competitive.

“We will continue to embrace strategies that enhance our services to our customers while ensuring our long-term business continuity, without compromising best practice.”