Federal Government Scrutinizes MTN and IHS Infrastructure Deal
The Federal Government of Nigeria, through the Nigerian Communications Commission (NCC), has initiated a comprehensive review of the recent infrastructure agreements between MTN Nigeria and IHS Towers.
This regulatory intervention comes as the telecommunications sector witnesses a deepening consolidation of its physical assets, raising critical questions regarding market competition, service quality, and the long-term stability of Nigeria’s digital economy.
The scrutiny is aimed at ensuring that the transfer of tower management and the renewal of lease agreements do not create a monopolistic environment that could stifle smaller operators or lead to increased costs for consumers.
The core of the investigation centers on the strategic shift by MTN Nigeria the country’s largest mobile network operator to diversify its infrastructure partners. Recently, MTN announced that it would be transitioning approximately 2,500 tower sites from IHS Towers to ATC Nigeria (American Tower Corporation) following a competitive bidding process.
However, the subsequent negotiations for the remaining thousands of sites held by IHS have drawn the attention of the Ministry of Communications, Innovation, and Digital Economy. The government’s interest lies in the “tower-sharing” model, which is essential for reducing the capital expenditure (CAPEX) of telecommunications firms in a high-inflation environment.
Economically, the telecommunications sector remains a primary driver of Nigeria’s non-oil GDP, contributing approximately 14% to the economy in recent quarters.
The relationship between Mobile Network Operators (MNOs) and Tower Companies (TowerCos) is fundamental to this growth. When infrastructure is consolidated under a few dominant players, the pricing power shifts, potentially impacting the operational costs of MNOs.
In a period where the Nigerian Naira has faced significant devaluation, many of these tower lease contracts which often have components indexed to the US Dollar have become a major fiscal burden.
The Federal Government’s scrutiny is intended to ensure that these commercial disputes do not result in service disruptions, as seen in previous months when localized disagreements led to temporary site shutdowns.
The consolidation of infrastructure also has direct implications for the rollout of 5G technology across Nigeria. To achieve the 70% broadband penetration target set in the National Broadband Plan 2020–2025, MNOs require an efficient and affordable network of towers.
If the deal between MTN and IHS is found to hinder the entry of new infrastructure providers or create an unfair pricing tier, it could slow down the expansion of high-speed internet in rural and underserved areas.
The NCC is currently evaluating whether the current lease structures align with its “Competition Practices Regulations,” which empower the commission to prevent any act that has the purpose or effect of substantially lessening competition in a communications market.
From a corporate governance perspective, the friction between MTN and IHS Towers has also highlighted the complexities of shareholder rights and management control.
IHS Towers has faced pressure from major shareholders, including MTN Group, regarding board representation and transparency. The Federal Government’s involvement acts as a stabilizing force, signaling to international investors that the Nigerian regulatory environment is proactive in protecting the integrity of the market.
This is particularly important for attracting Foreign Direct Investment (FDI), as investors seek a balance between profitable commercial agreements and a fair regulatory framework that prevents market capture by dominant entities.
The Ministry has indicated that the scrutiny will include a technical audit of the sites in question. This audit will assess whether the consolidation of towers under specific providers impacts “Quality of Service” (QoS) metrics, such as call drop rates and data speeds.
There is a technical concern that excessive consolidation can lead to “single points of failure” where a technical glitch or a security breach at one TowerCo could paralyze a significant portion of the national network. By diversifying the providers, the government hopes to build a more resilient digital infrastructure that can withstand both economic shocks and technical failures.
As the 30-day review period progresses, the industry expects a set of new guidelines regarding “Infrastructure Sharing and Collocation.”
These guidelines are likely to mandate more transparent pricing models and swiftSet featured imageer dispute resolution mechanisms to prevent commercial disagreements from escalating into national connectivity crises.
The government’s move is a clear indication that while it supports private sector deals, the strategic importance of telecommunications infrastructure to national security and economic productivity necessitates a “hands-on” regulatory approach.
The final resolution of the MTN-IHS deal will likely set a precedent for other operators in the Nigerian market, such as Airtel and Globacom, who are also navigating the high costs of infrastructure maintenance.
The Federal Government’s objective remains to foster a competitive landscape that encourages innovation while protecting the consumer from the inflationary pressures of rising operational costs.
The outcome of this scrutiny will be a defining moment for the Nigerian telecoms sector, determining the pace of digital inclusion and the efficiency of the infrastructure backbone for years to come.
