MTN, IHS in landmark tower agreement
In line with continued efforts to further raise service levels for its customers 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 MTN’s mobile network towers in Nigeria. The transaction is expected to reduce MTN Nigeria’s operating costs, drive network efficiencies and further expand MTN’s voice and data capacity.
Under the terms of the transaction and subject to requisite regulatory approvals, the 9,151 towers will be transferred to a new company which will be owned jointly by MTN and IHS. IHS will have 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.
Sifiso Dabengwa, Group President and CEO of MTN Group, said: “We are delighted to have entered into a further transfer transaction with IHS, in our largest African market. IHS’ 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.
Commenting on the transaction, Michael Ikpoki, MTN Nigeria CEO said: “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”.
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’ centralised Network Operations Centre (NOC) in Nigeria to optimise operations and increase IHS’ 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.
Issam Darwish, CEO of IHS Holdings, commented: “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. 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’ focus on quality of service, innovative tower management and sustainable energy approach.”