MTN Nigeria is in the process of renegotiating its high-rise contracts for periodic reviews.
The company noted that contract renegotiations are important to mitigate the effects of forex liberalization and higher energy costs.
The company stated this in the context of the recent award of tower construction contracts to ATC and the imminent renewal of another 1,500 construction contracts.
MTN Nigeria CEO, Karl Toriola, made this statement at the recent MTN Nigeria Capital Markets Day.
He said: “Efficient tower contracts are key to ensuring cost-effective, deep broadband penetration and leading technology across our business, and in our drive to achieve differentiated value we will from time to time review the contracts we have with our partners to ensure optimal meet the requirements of our website.
“But beyond efficiency, we will also focus on cost optimization, the use of green energy and sustainability.”
In his presentation, MTNN CFO Modupe Kadri outlined the current breakdown of the company’s high-rise business.
He stated: “IHS currently has 14,600. branches (80 percent), compared to 2.3 thousand ATC facilities (13 percent). About 2.5 thousand network locations within the IHS portfolio, which expire in 2024 and 2025, were awarded to ATC following a highly competitive tender process.
“This will reduce the IHS portfolio to PLN 12,100. locations (66 percent) and increasing ATC to 4.7 thousand (26 percent) of the total portfolio. The remaining IHS locations will expire between 2025 and 2029, with the majority in 2029. It is important to say that the renegotiation of the tower contract, supported by disciplined capital allocation, is very important in mitigating the effects of forex liberalization and higher energy costs.”
The company further said it is excited about the prospects of Nigeria’s liberal economic reform agenda, which provides an opportunity to unlock hidden growth potential.