MTN Nigeria and Airtel Nigeria accounted for 57% of IHS Towers’ revenue in 2024, highlighting its heavy reliance on a handful of key customers in its largest market. Nigeria, which contributed 58.3% of IHS Towers’ total earnings, remains the dominant revenue driver for the world’s fifth-largest multinational tower company.
IHS Towers’ revenue fell to $1.7 billion in 2024 from $2.1 billion in 2023, with a staggering 98.5% of its earnings tied to just three mobile network operators: MTN Nigeria, Airtel Africa, and MTN South Africa Any downturn affecting these key customers—including economic instability, currency devaluation, or regulatory changes—could substantially negatively impact IHS Towers’ financial performance.
Nigeria’s economic challenges, particularly the sharp devaluation of the naira since 2023, have intensified inflation and increased financial uncertainty for tower businesses operating in the country. With 58.3% of IHS Towers’ revenue tied to its Nigerian operations, further economic deterioration could hinder its growth and profitability. The company has acknowledged these risks particularly the potential impact on its key customers’ ability to meet lease obligations and sustain demand for tower infrastructure.
IHS Towers is grappling with rising operating costs, driven mainly by rising fuel expenses, site maintenance, and security. Power generation remains its largest expense, making up 39.2% of the company’s cost of sales in 2024, up from 33.5% in 2023. The company spent $348 million on power generation in 2024 compared to $396 million in 2023.
To save costs, the company has invested in hybrid energy solutions, combining diesel generators with solar and battery systems. As of December 2024, 41% of its sites ran on hybrid power, 33% used grid electricity with backup generators, and 18% relied solely on generators. The remaining 8% operated on direct grid connections or alternative energy sources like solar power “We, or third-party contractors we have engaged for certain sites, are responsible for monitoring the diesel levels of our generator tanks and scheduling diesel deliveries,” IHS said in its financial report. “ Given the importance of diesel for the operation of our sites in many of our African markets, we may purchase diesel in large quantities, which is then stored at our facilities.”
Beyond energy costs, the financial burden of expanding its network remains significant. As of December 2024, the cost of building a new tower ranged between $50,000 and $100,000 in Africa, while in Latin America, it ranged from $40,000 to $80,000. These high costs pose a challenge for further expansion, especially in an economic environment where access to financing and foreign exchange remains restricted.
Despite securing long-term Master Lease Agreements (MLAs) that typically last five to ten years, IHS Towers’ revenue remains highly dependent on the financial health of its key customers. Many of these mobile network operators rely on substantial debt or external funding to sustain operations. If they struggle to secure financing, they may cut back on infrastructure investments, reducing demand for IHS Towers’ services and impacting its revenue.
However, CEO Sam Darwish remains optimistic about growth opportunities, particularly in Nigeria. The recent approval of a tariff increase by the Nigerian Communications Commission (NCC), now being implemented by major operators like MTN Nigeria and Airtel Nigeria, is expected to boost investments in telecom infrastructure.
“We are extremely bullish on Nigeria at the moment,” Darwish said, expressing confidence that the tariff adjustments will positively impact the industry in 2025 as telcos expand their networks to enhance service delivery.
IHS Towers continues to maintain its Africa dominance in the telecom infrastructure industry, managing 39,229 towers across six African and two Latin American countries as of December 2024.It is the largest independent tower operator in six of its eight markets and the only independent scale operator in four. While its market leadership is undisputed, the company’s heavy reliance on Nigeria and a narrow customer base means it will need more than just towering ambitions to weather the storms ahead.
