Back in May, we reported that MTN Nigeria was looking to sell stakes in its nationwide network of towers, valued at an estimated $1 billion. This was in an attempt to reduce MTN Nigeria’s operating costs, drive network efficiency and further expand MTN’s voice and data capacity.
MTN has finally reached an agreement in principle with IHS Holding Limited for the transfer of its towers business, comprising of up to 9,151 of MTN’s mobile network towers in Nigeria. 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 however 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.
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.
MTN is currently Nigeria’s biggest telecoms network with 46% of the marketshare.
