South Africa’s MTN Group said its planned full takeover of tower operator IHS Towers would deliver a R2 billion recurring profit boost, strengthening the telecom giant’s control over critical digital infrastructure across Africa.
The Johannesburg-based operator said the transaction would raise its 2025 pro forma profit after tax to R35.7 billion from R27.4 billion, although much of the increase would come from one-off accounting gains linked to the acquisition.
After stripping out non-recurring items, including a R3.2 billion gain from a subsidiary disposal and a R1.07 billion tax impairment reversal, MTN estimated the underlying profit uplift from the deal at R2.011 billion.
The deal marks a major strategic shift for MTN, which years ago sold thousands of towers to infrastructure firms such as IHS to reduce costs and free up capital. Now, as data demand, artificial intelligence, cloud services and digital connectivity drive infrastructure value higher, MTN is moving to regain direct control of key assets in some of its fastest-growing markets.
The telecom operator announced last year that it planned to buy the remaining 75 percent stake in IHS that it does not already own. In February, the IHS board accepted MTN’s offer of $8.50 per share.
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IHS operates nearly 29,000 towers across Africa, supporting multiple mobile operators in major MTN markets including Nigeria, Ghana, Cameroon and Côte d’Ivoire.
Ralph Mupita, MTN Group president and chief executive officer described the acquisition as a strategic move to strengthen the company’s long-term position in Africa’s digital economy.
“This proposed transaction is a pivotal step in further strengthening MTN Group’s strategic and financial position for a future where digital infrastructure will become ever more essential to Africa’s growth,” Mupita said.
Analysts say the acquisition reflects a broader industry trend where telecom operators are reassessing earlier tower sale strategies as infrastructure ownership becomes increasingly valuable for network expansion, 5G rollout and data traffic growth.
The transaction is also expected to improve MTN’s operational flexibility in markets where energy costs, currency weakness and network expansion pressures have weighed on profitability.
MTN said the acquisition would increase group EBITDA by nine percent to R107.4 billion on a pro forma basis, while recurring EBITDA would rise 5.3 percent to R103.8 billion.
The deal would also raise MTN’s debt-to-EBITDA ratio to 0.8 times from 0.3 times, though the company remains within conservative leverage levels compared with many global telecom peers.
The group added that headline earnings per share, a key profitability measure in South Africa, would rise by 8.3 percent on a once-off basis to R13.79 per share.
The company also forecast R3.9 billion in net foreign exchange gains and interest income linked to the transaction.
Sam Darwish, IHS chairman and chief executive officer said the transaction deepened the long-standing relationship between the two companies.
“The proposed transaction deepens our long-standing partnership with MTN as it combines Africa’s largest mobile network operator with one of its largest digital infrastructure platforms,” Darwish said.
The takeover announcement came as MTN separately reported strong first-quarter operating performance, driven largely by growth in Nigeria and Ghana.
Core earnings before interest, tax, depreciation and amortisation rose 27.9 percent in constant currency to 27.6 billion rand in the three months ended March 31, while EBITDA margin widened by three percentage points to 47.6 percent.
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Service revenue grew 21.1 percent in constant currency to 56.8 billion rand, supported by a 41.7 percent jump in revenue from MTN Nigeria and a 35.7 percent increase from MTN Ghana.
Data revenue remained MTN’s biggest growth driver, rising 35.4 percent, while fintech revenue increased 20 percent, underlining the company’s increasing dependence on digital services beyond traditional voice calls.
In South Africa, however, MTN continued to face pressure in the prepaid market, with service revenue rising only 0.7 percent.
The company said its prepaid recovery strategy was beginning to stabilise the business through stronger distribution, refreshed offerings and tighter credit controls.
MTN also said it continued to manage energy supply risks across its markets by working with partners to secure sufficient diesel supplies for network operations.