Nigeria: MTN reviews tower contracts to enhance efficiency

MTN Nigeria’s Chief Executive Officer, Karl Toriola, has announced the company’s commitment to periodic reviews of its tower contracts. This strategic initiative aims to enhance efficiency and maximize performance from vendors. The decision comes in light of the recent tower contracts awarded to ATC, with an additional 1,500 site contracts set for renewal in the near future. The focus on contract reviews underscores MTN’s dedication to optimizing its operations and ensuring the continued excellence of its network infrastructure.

Toriola gave insight at MTN Nigeria’s Capital Markets Day, which was held at the Transcorp Hilton, Abuja. He 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 optimization, green energy utilization and sustainability.” Taking a cue from Toriola, MTNN’s Chief Financial Officer, Modupe Kadri, gave a breakdown of the company’s tower business, saying energy efficiency initiatives and independent power projects (IPP) are essential in achieving excellent delivery of the company’s expense efficiency programme.“IHS currently has 14.6k sites (80 per cent) as against ATC’s 2.3k’s (13 per cent).

“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,” he said.

“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,” he said.

Amongst other things, Toriola used the CMD event 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.

“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,” he said.