In 2024, MTN Nigeria and Airtel Nigeria were responsible for 57% of IHS Towers’ revenue, underscoring its heavy reliance on a small number of key clients in its primary market. Nigeria, which accounted for 58.3% of IHS Towers’ total earnings, continues to be the primary revenue generator for the multinational tower company.
IHS Towers experienced a decrease in revenue from $2.1 billion in 2023 to $1.7 billion in 2024. A significant portion, 98.5%, of its earnings were linked to just three mobile network operators: MTN Nigeria, Airtel Africa, and MTN South Africa. Any adverse developments affecting these major customers, such as economic uncertainties, currency devaluation, or regulatory modifications, could have a substantial negative impact on IHS Towers’ financial performance.
The economic challenges in Nigeria, including the devaluation of the naira since 2023, have exacerbated inflation and financial unpredictability for tower companies operating in the region. With over half of its revenue tied to operations in Nigeria, further economic decline could impede the company’s growth and profitability. IHS Towers has acknowledged these risks, particularly regarding its key customers’ ability to fulfill lease obligations and maintain demand for tower infrastructure.
IHS Towers is facing escalating operating expenses, primarily driven by increasing fuel costs, site maintenance, and security expenditures. Power generation accounts for the largest expense, comprising 39.2% of the company’s cost of sales in 2024, up from 33.5% in 2023. The company has started investing in hybrid energy solutions, combining diesel generators with solar and battery systems to reduce costs.
Despite the financial burden of expanding its network, IHS Towers remains optimistic about growth opportunities, particularly in Nigeria. The recent approval of a tariff increase by the Nigerian Communications Commission is expected to encourage investments in telecom infrastructure, benefiting major operators like MTN Nigeria and Airtel Nigeria.
As of December 2024, IHS Towers manages 39,229 towers across six African and two Latin American countries, asserting its dominance in the telecom infrastructure industry. However, its heavy reliance on Nigeria and a limited customer base pose challenges that require strategic planning to navigate uncertainties in the market ahead.