Tower monopoly: “Globacom is not bothered by MTN’s acquisition of IHS”, insider says

Amidst recent concerns over MTN Group’s $6.2 billion acquisition of IHS Tower, a Globacom insider has claimed that the deal is less of a concern for the telco. The rep, who prefers anonymity, noted that the MTN and IHS merger is just business as usual. 

The insider explained that “MTN had some years ago sold or handed over its towers to IHS to manage,” adding that the decision to buy them back does not pose any implications for other operators. 

The development signals that while stakeholders and commentators are rightly concerned about the monopolistic possibilities of the deal for the industry, Globacom remains unbothered and confident in its position.

And there’s a reason for the confidence. 

Globacom is the only Nigerian telco that manages its entire tower network, with a 22% share of Nigeria’s 39,880 towers. This gives the company independent control and significant competitive advantages in terms of operational excellence and service quality. 

“Glo owns and manages its own towers. So what MTN and IHS are doing has no bearing on us and does not point to a monopoly of infrastructure,” the insider reaffirmed. 

There have been concerns about the implications of MTN’s control of tower infrastructure, which serves other major network providers: Airtel and T2mobile.

Some asked if MTN’s control of a major tower company could create pricing or access barriers for rivals, with fears that this could reshape the industry dynamics to favour a player over another. 

Consequently, the federal government announced plans to assess its impact on the long-term sustainability, investor confidence, and performance of the sector. 

While providing grounds for the decision, the Minister of Communications, Innovation, and Digital Economy, Dr Bosun Tijani, said the assessment is “to ensure strategic actions by private sector operators are in line with the  market development agenda under the Renewed Hope policy directions of the President.”

The Nigerian government also wants to ensure that any “market consolidation or structural changes” protect consumers, safeguard investments, and protect the long-standing rejuvenated sector in terms of positive earnings.

Why MTN needs IHS’s towers

MTN’s move to acquire IHS Tower forms one of the strategic, yet predictable moves by the leading African telco. 

The decision to buy back its towers and the remaining 75% stake in IHS is a move towards expanding its assets on the balance sheet and taking more control of a significant part of its daily operations. 

While it signals increased cost of running, the re-ownership of the tower infrastructure eliminates long-term lease costs. 

In addition, the buy-backed decision was linked to MTN’s limited voting rights in IHS, even with its current 25% share. 

MTN owns a minimal amount of its infrastructure (approx. 286 towers in 2023), preferring to lease from IHS and American Tower Corporation (ATC). Throughout the 2010s, MTN sold thousands of its towers to IHS across various African markets (including Nigeria, Côte d’Ivoire, Cameroon, and Zambia) to reduce costs and focus on core services.

IHS Towers operates over 28,700 towers across five key African markets (Nigeria, Cote d’Ivoire, Cameroon, Zambia, and South Africa), serving 10 out of the 13 major mobile network operators on the continent. The number dropped from about 30,000 after IHS Towers sold 100% of its Rwandan operations (approximately 1,467 sites) to Paradigm Tower Ventures in October. 

Nigeria is its largest market, powered by MTN Nigeria, with over 16,000 sites, followed by South Africa with 5,600+ sites and Côte d’Ivoire with 2,600+ sites. Others are Cameroon (2,400+ sites) and Zambia (1,900+ sites).

For now, the deal is live, and both companies have filed a merger agreement with the U.S. Securities and Exchange Commission, and the deal is expected to be finalised by the end of 2026. 

Also Read: MTN offers IHS Tower employees 12 months’ salary, other benefits in merger deal.

The winners vs others

With MTN acquiring IHS, the telco will be stronger and gain an additional edge in the market. 

The leading telco will control the entire stake and have an unquestionable say over its operations. This deal will eradicate the tower-outsourcing model it has operated for years and bring the infrastructure business back under its full control.

Although it has financial implications in management, the operator gains tighter control over network quality, accelerates 5G deployment, and reduces long-term expenditure associated with leasing.

While many operators sell towers to tower infrastructure companies to free up capital, they don’t have the ultimate access control, and are third parties who cannot directly make amends in case of network outages. 

For Airtel, T2mobile, and other telcos in Nigeria, leasing towers from a fellow competitor might not only prove difficult but questionable. Knowing that a major part of their daily operation and quality delivery lies in the hands of a rival.

These players will likely observe, for now and start weighing their options if the unlikely happens. 

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