MTN, the South Africa-based operator group, struck an agreement with IHS Holding which will see the operation of more than 9,000 towers in Nigeria transferred to the tower company.
MTN said the move is in line with its efforts to improve service levels in Nigeria but also reduce operating costs in the country, drive network efficiencies and expand its voice and data capacity.
The deal will see 9,151 towers that support MTN’s Nigerian network transferred to a new company jointly owned by MTN and IHS, with the latter having full operational control of the business.
The new company has committed to invest $500 million over the next four years in maintaining and upgrading the towers. Further investment will be made into the IHS network operations centre in Nigeria to achieve network availability of more than 99 per cent, and improve energy efficiency.
The company will also offer independent infrastructure sharing services to other mobile operators and ISPs in Nigeria.
“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,” said Michael Ikpoki, MTN Nigeria CEO.
The transaction is expected to close in the fourth quarter of the year.
The deal is the fifth between the two companies, following transactions over the last couple of years in the Ivory Coast, Cameroon, Rwanda and Zambia. Once the Nigeria deal is completed, IHS will manage more than 20,000 towers in Africa.
MTN has operations in 21 countries across the Middle East and Africa. It is the largest operator in Nigeria with 58.4 million connections at the end of the second quarter, according to GSMA Intelligence figures. Its closest rival is Bharti Airtel, with 26.5 million connections.
IHS purchased more than 2,000 towers from Etisalat at the beginning of August as the UAE-based operator group looked to improve network performance and accelerate the roll out of 2G and 3G coverage and new services.