To drive efficiency and ensure optimal performance from vendors, the MTN Nigeria is set for periodic reviews of the its tower contracts.
This is against the backdrop of the recent award of tower contracts to ATC, and the fact that another 1,500 site contracts will soon be due for renewal.
The CEO of MTN Nigeria, Karl Toriola, gave the insight at MTN Nigeria’s Capital Markets Day, which was held at the Transcorp Hilton, Abuja on November 14th and November 15th.
According to him, “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 optimisation, green energy utilisation and sustainability.”
Taking a cue from Toriola, in his own presentation, MTNN’s Chief Financial Officer, Modupe Kadri, gave the current 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%) as against ATC’s 2.3k’s (13%). 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%) and increase ATC to 4.7k (26%) 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.
Amongst other things, Toriola also 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.
The event was attended by local and international investors who had the opportunity to engage high-level representatives of the Nigerian government on the country’s macroeconomic reforms, as well as MTN Nigeria executives, who provided a comprehensive overview of the company’s progress against key ‘Ambition 2025’ growth indicators.