Telecommunications is infrastructure. And infrastructure is not cheap. The firm that has made the most astute investment in infrastructure leads the pack. In Nigeria, MTN is generally regarded as the foremost operator, with close to 90 million subscribers on its network.
It was from Emmanuel Ekuwem, who, as President of the Association of Telecommunications Companies of Nigeria, I first heard the phrase ‘telecommunications is the infrastructure of infrastructure’. It is the platform on which all other platforms ride. Telecommunications provide the connections that connect the economy, spurring socio-economic growth.
In this dynamic realm of telecommunications, the transfer of infrastructure management companies can often trigger concerns about potential disruptions in services. So, it’s no surprise that MTN Nigeria made headlines recently with its decision to lease 2,500 towers to American Tower Corporation (ATC), raising questions about the implications and strategies in place to ensure a seamless transition without compromising network stability. It is a huge deal. It is a big deal.
Amid apprehensions voiced by stakeholders, MTN Nigeria has unequivocally assured customers and investors that the transition to ATC will not impede the network’s functionality or reliability. The telecommunications giant emphasised its commitment to maintaining a stable network and meeting customer demands throughout this transformative process.
The transfer, though significant, isn’t unprecedented in the industry. However, the magnitude of such an alteration requires careful planning and execution. MTN Nigeria’s Chief Corporate Services and Sustainability Officer, Tobechukwu Okigbo clarified that, despite concerns raised by IHS Holding, the move to ATC would not disrupt network services. He highlighted that the partnership with ATC aims to usher in a new era of connectivity in Nigeria.
One of the pivotal aspects of ensuring a smooth transition involves the seamless transfer of infrastructure between two behemoth companies. Okigbo emphasised that tower transfers between infrastructure companies do not inherently result in network disruptions, pointing towards a rigorous and transparent procurement process that culminated in the final agreement with ATC.
The decision to opt for an American company like ATC might stem from a combination of factors, such as the competitive proposal, technological expertise, and possibly other advantageous terms not disclosed in the news.
Speculations arise about undisclosed terms. Industry watchers contend that the undisclosed terms may include the company’s desire to get on the good books of the world’s sole superpower. Still fresh in the minds of many are MTN’s titanic efforts to win permission to repatriate millions of dollars of profit bottled up in Iran by American sanctions on the Iranian financial system. The firm’s argument at the time was that “U.S. sanctions should not have unintended consequences for non-U.S. companies.”
Of course, there is also the IHS shareholder dispute with MTN Group, its largest shareholder with a 26 per cent stake, along with French financial investor Wendel and activist investor Blackwells Capital over governance issues. The immortal words of Tupac Shakur come to mind here: “Just because you lost me as a friend doesn’t mean you gained me as an enemy. I’m bigger than that; I still wanna see you eat, just not at my table”.
Despite this, only a fraction of MTN’s towers will move to ATC. Yes, a significant portion remains with IHS. Reports indicate that IHS owns 16,000 towers in Nigeria, with 14,600 leased by MTN. So, despite the ripples that this deal is generating, only about 13 per cent of MTN’s portfolio will go to ATC, while a whopping 80 per cent remains with IHS.
MTN’s choice to partner with ATC today may, however, underscore the company’s commitment to innovation, sustainability, and enhancing connectivity for its customer base in Nigeria. ATC is, after all, a global leader in the wireless infrastructure space.
Furthermore, MTN Nigeria’s stance on engaging with IHS on future opportunities highlights the company’s dedication to exploring value optimization through meticulous and competitive processes. Okigbo said that, while the agreement with ATC is final, MTN remains open to future collaborations, inviting competitive propositions that align with their strategic objectives.
As the telecommunications industry in Nigeria undergoes this transformative phase, MTN Nigeria’s strategic decisions signify a commitment to not only adapt but also thrive in an increasingly competitive market.
The transfer of tower leasing from IHS to ATC marks a significant milestone for MTN Nigeria. To ensure a seamless transition, the company must continue to focus on expense efficiencies, sustainability, and meeting customer demands.
Maintaining stable service during this transition involves meticulous planning, rigorous governance approvals, and a commitment to fair and transparent processes. MTN Nigeria must put in the work here. And the regulator, the NCC, needs to keep a keen eye on the proceedings for the good of the industry and the country.
Eromosele, a corporate communications professional and public affairs analyst, wrote via elviseroms@gmail.com
