MTN, IHS saga over tower lease must not exceed Q1,2024

•Banks, Telcos must find way around N200bn USSD debt

Despite global economic downturn which started ravaging almost all sectors since the COVID-19 era in 2019, the Information and Communications Technology, ICT sector has remained constant in delivering values and bailing out other sectors in quagmire.

In Nigeria, it overtook the oil sector which had been the economic cornerstone of the country, delivering hopeful and handsome contributions to the gross domestic product, GDP.

At the heart of the magic wand of the sector to the Nigerian economy, however, is the telecommunications and information services sub sector. Telecom has led the huge contributions the aggregate ICT sector has added to the GDP. Others are Publishing; Motion Picture/ Sound Recording/ Music Production; and Broadcasting.

However, the goose that lays the golden egg, had notwithstanding, been bedeviled by issues which never actually allowed it perform to full capability. Most of these can be ignored because of their insignificant impacts but two, the tower lease saga between MTN and IHS Towers and the Unstructured Supplementary Services Data, USSD debt debacle between the banks and telecom operators must be attacked ferociously by relevant authorities.

While the USSD debt issue is capable of frustrating bank services in the New Year, the tower leasing debacle could adversely affect telecom facilities and snowball into worsening poor quality of telecom services. None of these will benefit either individual subscribers or the aggregate economy.

MTN vs IHS Towers In recent weeks, the media has

been awash with how MTN Nigeria, the largest telecommunications operator in the country farmed out 2500 of its telecom towers to American Towers Corporation, ATC to manage, against its old partners, IHS Towers and how the Tower company could not have any of that.

Almost immediately the news of the lease filtered, there was counter information that IHS has given improved offers which MTN had purportedly considered.

However, MTN instantly dispelled the rumour saying its corporate governance can never allow it reverse a concluded bid process.

Chief Corporate Services and Sustainability Officer, of MTN Nigeria Tobechukwu Okigbo said: “Our preference is always for bilateral renewal, subject to competitive pricing and terms. In this instance the ATC proposal was superior. So, the agreement with ATC over the 2,500 sites is final, having gone through a rigorous process involving our highest governance approvals.”

He added that MTN will continue to engage constructively with IHS on further opportunities that arise, including the renewal of the next vintages of towers that come up for renewals in 2025.

But in a surprising manner, a Nigerian civil society group, known as HEDA, said to be active in promoting sustainable development and protection of the environment, has gone to gone to court to get an injunction restraining MTN and ATC from from sitting new base stations where there are already existing base stations in close proximity, citing health and environmental concerns.

However, industry practitioners are curious that at the hearing of the case of Incorporated Trustees of the HEDA Resource Centre, against FMEEM and four others in suit FHC/L/CS/2359/2023, on December 7, 2023, Trial judge, Justice Y. Bogoro, of a Federal High Court, sitting in Lagos, upheld the prayers of the plaintiff/applicant, HEDA Resource Centre and ordered the 4th and 5th defendants, ATC Nigeria and the MTN Nigeria respectively, together with their “servants, agents, privies and/or assigns from commencing, continuing or completing the construction or erection or installation of any base trans-receiver stations/towers/masts (BTS) within close proximity to IHS’ existing BTS or operating any BTS within close proximity to IHS’ existing BTS pending the determination of the motion on notice for interlocutory injunction.

The judge also ordered the MTN Nigeria whether by its servants, agents, privies and/or assigns from moving, relocating, transferring any of its telecommunication equipment to any BTS site being or has been constructed, erected or built by ATC, which is in close proximity to the IHS’ existing BTS pending the determination of the motion on notice for interlocutory injunction.

This could effectively put on hold the implementation of the relocation of 2,500 towers project from IHS to ATC as announced by MTN recently, till February 14, 2024, when the matter will be heard.

Meanwhile, a top industry stakeholder who pleaded anonymity has urged the Nigerian Communications Commission, NCC to wade into the matter and call IHS to order before the fortunes of the sector begin to nosedive.

He said: “The issue between MTN and IHS is unfortunate. It is a transactional issue, but if NCC treats as that and refuse to wade in, we may lose part of the industry fortunes in 2024. What are the issues? MTN is the biggest telecom client of HIS in Nigeria. Globacom manages own towers, ATC manages most of Airtel’s towers, and now that MTN is gradually farming out its sites to ATC, it means that the ailing 9mobile alone will not sustain IHS’ business in the country. You can now see while the company is fighting as if its life is dependent on the matter.

“But having said that, IHS has little or no hold on the matter. Like I said it’s a business case. MTN called for renewal through a bidding process, IHS participated and lost to ATC, so no one, not even a court can a choice of partner to a company like MTN.

” My own investigation shows that not only that ATC made improved bidding, it has invested in clean energy resources a long time ago, meaning its sites will run on renewable energy, which will help MTN in its Net Zero emission ambition. This is against that of IHS which is said to depend more on diesel.

” Also, MTN’s deal with ATC is going to be Naira denominated against that of IHS which is said to be dollar denominated and has squeezed MTN during the crazy forex regime” he added.

Telcos vs Banks on USSD

Recall that for many years now, the telcos and banks have been having running dispute over debts accrued from unpaid charges agreed to the telcos on whose platforms the USSD services emanate to service the bank customers.

USSD transactions are those done on the mobile phones like fund transfers through short codes, checking of bank details and account balances, among others done even without data or internet connections.

Several interventions have been made between the NCC, CBN, and relevant ministries, yet the debt profile allegedly keeps rising instead of depleting.

As at the last three interventions by the NCC, CBN and Minister of Communications between 2020 and  2023 the debt profiles were between N42 billion, N80 billion and N120 billion.

But today a reliable source from the operators said it has climbed well above, N200 billion and there is no hope it will be cleared soon.

A reliable Operator told Hi-Tech that unless good results come from pockets of discussions going on at the moment, the telcos might be forced to withdraw USSD services to the banks from next year.

At a recent meeting with the sector stakeholders in Lagos recently, the new NCC EVC, Dr Aminu Maida promised to look into disputes in the industry as much as he vehemently reject poor quality of services from the operators.

Well, perhaps until he tackles these two issues, he may be having more problems in his hands than he ever envisaged.