How MTN and Airtel Drive 57% of IHS Towers’ Revenue in 2024 and What It Means for the Future

Telecom Giants Shape IHS Towers' Revenue Landscape

In a striking revelation, MTN Nigeria and Airtel Nigeria contributed a staggering 57% of IHS Towers’ total revenue in 2024. This statistic underscores the company’s significant dependency on these key players within the telecom sector in Nigeria, its largest market. With IHS Towers generating $1.7 billion in revenue, a sharp decline from $2.1 billion in the previous year, this reliance raises concerns about the company’s vulnerability amid economic fluctuations.

Economic Turmoil and Its Risks

The devaluation of the Nigerian naira has intensified financial uncertainty, leading to increased operating costs for tower businesses. With 58.3% of IHS Towers’ revenue reliant on its Nigerian operations, any negative shift affecting its major customers could severely hamper growth and profitability. This financial framework calls attention to the broader implications of economic health on the telecom infrastructure ecosystem.

Transitioning to Sustainable Energy Solutions

Amid rising costs, particularly in power generation—which accounts for 39.2% of sales— IHS Towers has begun investing in hybrid energy solutions. The shift toward combining diesel generators with solar and battery systems reflects a strategic move to reduce operational expenses. As of December 2024, 41% of IHS’s sites utilized hybrid power, highlighting the potential for innovation in energy management to positively impact both the environment and operational costs.

The Cost of Expansion: A Growing Concern

Building new towers costs between $50,000 and $100,000 in Africa, a hefty sum that could restrict future expansions amidst tight financing conditions. Despite long-term Master Lease Agreements providing a safety net, IHS Towers’ revenue remains heavily tied to the financial stability of its mobile network operator partners. Thus, the growth prospects hinge significantly on the operators’ access to funding and their ability to invest in infrastructure.

Looking Ahead: Optimism in the Face of Challenges

CEO Sam Darwish exhibits optimism as new tariffs approved by the Nigerian Communications Commission (NCC) promise to spur telecom investments. It’s a pivotal moment for stakeholders looking to capitalize on growth opportunities within the region. For tech entrepreneurs, startups, and investors, understanding these dynamics in telecom can guide strategic decisions poised to influence Africa's tech landscape, particularly amid the rising trends in fintech and AI.

For those poised to make strides in Africa's growing technology sector, it's crucial to stay informed about the challenges and opportunities presented by players like IHS Towers and the overarching economic climate.