MTN Plans To Review Tower Contracts

By Clement Alphonsus

MTN has noted that there would be periodic reviews of the company’s tower contracts to drive efficiency and ensure optimal performance from vendors. This was disclosed by the Chief Executive Officer of MTN Nigeria, Karl Toriola, who said, this was against the backdrop of the recent award of tower contracts to ATC and the fact that another 1,500 site contracts would soon be due for renewal.

While speaking at MTN Nigeria’s Capital Markets Day, which was held at the Transcorp Hilton, Abuja. Toriola 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.

“But beyond efficiency, we will also focus on cost optimisation, green energy utilisation and sustainability.” Taking a cue from Toriola, MTNN’s Chief Financial Officer, Modupe Kadri, disclosed a breakdown of the company’s tower business, noting that energy efficiency initiatives and independent power projects (IPP) are essential in achieving excellent delivery of the company’s expense efficiency programme.

He said, “IHS currently has 14.6k sites (80 per cent) as against ATC’s 2.3k’s (13 per cent). About 2.5k network sites under IHS portfolio due to expire in 2024 and 2025 have been awarded to ATC after a highly competitive bidding process. This will reduce IHS’ portfolio to 12.1k sites (66 per cent) and increase ATC to 4.7k (26 per cent) 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 liberalisation and higher energy costs."

During the CMD event, Toriola used the opportunity to announce the progress made on achieving the company’s ‘Ambition 2025’ Strategy, and the emerging opportunities in Nigeria’s digital economy to local and international investors.

According to him, “I am encouraged and excited at the prospect of a liberal economic reform agenda for Nigeria that presents an opportunity to unleash its latent growth potential. The recognition that private sector investment will be critical to that is clear, and we are already seeing steps being taken to enable the business environment. We believe that Nigeria continues to present significant opportunities for us to deliver inclusive growth, and expand access to connectivity while also supporting the drive for financial inclusion."