IHS Towers Expands Partnership With Airtel Africa by Renewing and Expanding Contract in Nigeria
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The announcement by IHS Nigeria and Airtel Nigeria signifies a substantial commitment in the telecommunications infrastructure sector. The deal secures 3,950 new tenancies, with a focus on the years 2024/2025 and extends 6,000 existing ones until 2031. This move reflects a strategic expansion and retention of key infrastructure by Airtel Nigeria, ensuring they have the necessary tower capacity to support their network expansion, including the rollout of 5G technology.
From a telecommunications perspective, the inclusion of 2,500 colocations is particularly noteworthy. Colocation is a practice where multiple mobile network operators (MNOs) share tower infrastructure to host their equipment. This is a cost-effective strategy that reduces the need for multiple towers, thus minimizing environmental impact and operational costs. Moreover, the commitment to green initiatives aligns with the global trend towards sustainable operations, potentially reducing energy costs and contributing to corporate social responsibility goals.
The agreement between IHS Nigeria and Airtel Nigeria incorporates a significant sustainability component. Both companies have pledged to cooperate on new green initiatives, which is in harmony with Airtel Africa's sustainability strategy and IHS Towers' Carbon Reduction Roadmap. This roadmap aims for a 50% reduction in carbon intensity by 2030, which is a bold target given the energy demands of telecommunications infrastructure.
Implementing green initiatives in the telecom sector often involves transitioning to renewable energy sources, optimizing energy consumption with newer, more efficient technologies and implementing energy management systems. These initiatives not only contribute to the global effort to combat climate change but can also result in long-term operational cost savings and improved brand reputation among environmentally conscious consumers.
The financial implications of this agreement for IHS Towers and Airtel Nigeria are multifaceted. For IHS Towers, securing both new and extended tenancies provides a predictable revenue stream well into the next decade. This can be favorable for the company's valuation and attractiveness to investors. On the other hand, Airtel Nigeria's commitment to a significant number of tenancies indicates a strong forecast for customer growth and network utilization, which could translate into increased revenue and market share.
However, investors should also consider the capital expenditure associated with the build to suit sites and the 5G amendments. While these investments are essential for future-proofing the business and staying competitive, they will impact short-term cash flows. The long-term benefits, including the potential for higher margins due to increased efficiency and customer reach, should be balanced against these initial costs.
Commits 3,950 Tenancies Over The Next 5 Years
With The Majority Over 2024/2025
Renews Approximately 6,000 Existing Tenancies Through 2031
The agreement includes 2,500 colocations in addition to 5G amendments and build to suit sites to be owned and operated by IHS Nigeria.
In line with Airtel Africa’s sustainability strategy launched in October 2021, and IHS Towers’ plans to pursue its Carbon Reduction Roadmap aimed at reducing IHS Towers’ intensity metric by
Sam Darwish, Chairman & CEO, IHS Towers, said “The expansion and renewal of our relationship with Airtel Nigeria is a testament to our continued commitment to serving our customers and the connectivity demands of
About IHS Towers: IHS Towers is one of the largest independent owners, operators and developers of shared communications infrastructure in the world by tower count and is one of the largest independent multinational towercos solely focused on the emerging markets. The Company has nearly 40,000 towers across its 11 markets, including
View source version on businesswire.com: https://www.businesswire.com/news/home/20240207148425/en/
Source: IHS Holding Limited
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