Airtel Africa extends tower lease agreements with American Tower Corp. for $1.2 billion
Key Points
- Airtel Africa inks $1.2 billion lease extension with American Tower Corp. for 7,100 sites across Nigeria, Uganda, Kenya, and Niger, stabilizing operational costs.
- The deal aims to stabilize costs and enhance renewable energy usage, reducing reliance on diesel at key sites.
- Airtel faces ongoing reviews from the Comesa Competition Commission, which may impact the partnership's terms in Kenya and Uganda.
Airtel Africa Plc, the pan-African telecommunications provider and a subsidiary of Bharti Airtel, the telecom giant led by Indian billionaire Sunil Bharti Mittal, has inked a $1.2 billion, 12-year extension on its tower lease agreements with American Tower Corp. (ATC) across four high-growth African markets—Nigeria, Uganda, Kenya, and Niger.
The deal, covering 7,100 sites, aims to stabilize operational costs and accelerate sustainable energy usage, even as Airtel faces ongoing scrutiny from the Comesa Competition Commission over alleged anti-competitive practices.
Airtel Africa’s lease renewals support sustainability initiatives
The new lease agreements, detailed in Airtel Africa’s half-year financials through September 30, 2024, come as existing contracts approach expiration within the next two years. Airtel emphasized the independence of the renewed terms from the Comesa investigation, stating, “These renewals allow us to maintain benefits from contract structures, including currency-linked provisions.”
A substantial shift to renewable energy across key sites is anticipated, aimed at reducing diesel reliance and supporting Airtel's environmental targets, with potential for mid-term cost reductions.
Airtel Africa’s Vice President for Corporate Communications, Emeka Oparah, noted that the terms were commercially negotiated outside of regulatory inquiries, underscoring a focus on operational and environmental imperatives. The lease extensions are expected to bolster Airtel’s 5G rollout, expanding data capacity and reinforcing network stability in core growth markets.
However, the Comesa Competition Commission remains actively engaged. Chief Executive Willard Mwemba indicated reviews of the Airtel-ATC partnership’s potential competitive impact in Kenya and Uganda, noting that “if clauses breach Comesa’s Competition Regulations, we may require amendments or, if necessary, terminate the agreements entirely.”
Sunil Mittal’s Bharti Airtel
Bharti Airtel, founded by Indian billionaire Sunil Bharti Mittal, ranks as the third-largest mobile service provider globally by subscriber count.
Mittal, who currently holds the 74th spot on the Bloomberg Billionaires Index, has a net worth of $25.3 billion, largely derived from his 28-percent stake in Bharti Airtel.
In its H1 2024 results, Airtel Africa posted revenues of $2.37 million, marking a 9.65 percent decline in reported currency but a 19.9 percent increase in constant currency, driven by a 6.1 percent customer base expansion and an 11.1 percent rise in ARPU.
The company also launched a $50 million buyback as part of a $100 million capital optimization initiative aimed at boosting shareholder value.