MTN Group and Airtel Africa have entered into a strategic partnership to share mobile network infrastructure in Nigeria and Uganda, aiming to reduce operational costs while enhancing service coverage, the companies announced on Wednesday.
The collaboration comes as telecom operators in Africa face increasing demand for digital and financial services, while grappling with the high costs of building and maintaining networks, particularly for 5G deployment.
The agreement will enable both firms to extend coverage more efficiently, especially in rural and underserved areas where independent infrastructure investment may not be viable.
“There are opportunities within regulatory frameworks for sharing resources to drive higher operational efficiencies and improve returns,” said MTN Group CEO Ralph Mupita.
Airtel Africa’s Chief Executive Officer, Sunil Taldar, added that the partnership would eliminate costly duplication of infrastructure.
The initiative follows financial restructuring efforts by both companies to mitigate foreign exchange risks. In 2024, MTN Nigeria and Airtel Africa collectively repaid $1.2bn in foreign currency debt to ease the burden caused by the naira’s depreciation.
The Central Bank of Nigeria’s (CBN) unification of the foreign exchange market in June 2023 triggered a sharp decline in the naira’s value, leading to substantial foreign exchange losses for telecom operators.
MTN Nigeria, for instance, recorded its first post-tax loss of N137bn since its 2019 listing, while Airtel Africa reported a $89m loss for the year ending March 2024, largely due to forex-related challenges.
To counter this, MTN Nigeria reduced its outstanding foreign currency obligations from $416.6m in December 2023 to $20.8m by year-end 2024.
Similarly, Airtel Africa repaid $739m in foreign currency debt over the past year, significantly lowering its exposure to forex volatility.
Beyond Nigeria and Uganda, the telecom giants plan to explore further opportunities in other African markets, including Congo-Brazzaville, Rwanda, and Zambia.
The scope of future agreements may include radio access network sharing, fiber infrastructure partnerships, and, if necessary, the construction of new fiber networks to enhance connectivity.
Both companies have also shifted towards raising local debt to further shield themselves from forex fluctuations. As of 2024, Airtel Africa held 92 per cent of its debt in local currency, up from 79 per cent the previous year, while MTN Nigeria restructured its portfolio to 72 per cent naira-denominated debt from 56 per cent in 2023.
The telecom operators have also renegotiated lease contracts with infrastructure companies such as IHS, INT Towers Limited, and ATC Nigeria to optimize costs.
Industry analysts believe the network-sharing agreement, coupled with ongoing forex debt reduction efforts, will position Nigeria’s telecom sector for long-term profitability.
The recent regulatory approval for a 50 per cent increase in telecom tariffs is also expected to boost revenue streams and support margin recovery.
MTN, Airtel To Expand Network Coverage In Nigeria, Uganda is first published on The Whistler Newspaper
Source: The Whistler
