IHS Towers, Africa’s largest infrastructure company, sharply reduced its infrastructure spending in the first half of 2025, shifting from an aggressive growth posture to a more measured, cash-flow-driven strategy. The move comes amid significant portfolio changes, major asset disposals, and a deliberate focus on core markets, including Nigeria, South Africa, and Brazil.

IHS spent approximately $89.9 million on new tower projects in H1 2025, down from $106.8 million in the same period last year, representing a decline of roughly 15.8%. The drop was felt in both quarters: Q1 capital expenditure, or capex, fell 17.8% year-on-year to $43.6 million, while Q2 dropped 13.8% to $46.3 million.

The steepest reductions came from Latin America, where investment in new sites and fibre rollouts was scaled back. Nigeria, IHS’s largest market, also saw a notable slowdown—5.5% lower spending in Q1 and 10.4% lower in Q2—reflecting reduced maintenance, fibre deployment, and site upgrades.

Part of the lower spend stems from the company’s strategic asset sales, such as the December 2024 disposal of 1,672 towers in Kuwait, which reduced the number of markets needing fresh investment. In May 2025, IHS also announced the planned sale of 1,465 towers in Rwanda, expected to close in the second half of the year.

Pivot to capital discipline

The capex pullback marks a broader shift for IHS Towers from rapid expansion toward consolidation, operational efficiency, and balance sheet strength. Proceeds from asset disposals have been directed toward paying down high-interest debt, cutting net leverage from 3.7x at the end of 2024 to 3.4x in Q1 2025.

The company has also lowered its full-year 2025 capex guidance to between $240 million and $270 million, signalling that the company is prioritising margin improvement and financial resilience over market share gains at any cost. Efficiency programmes—such as Nigeria’s “Project Green”—have reduced the need for upgrades by optimising existing infrastructure.

“Our improved outlook reflects what we believe are the benefits of the solid commercial progress we have made as well as our strong focus on financial discipline, which is delivering sustained improvements in our profitability and cash flow generation,” said Sam Darwish, CEO of IHS Towers. 

Portfolio streamlining

As of March 31, 2025, IHS operated 39,212 towers worldwide, down from 40,278 a year earlier—a 2.6% decline. By the end of Q2, the figure was 39,184, with disposals rather than attrition accounting for most of the fall.

The strategy is clear: exit smaller or lower-yield markets, reduce operational complexity, and focus on regions with long-term tenancy contracts and higher colocation potential. Nigeria remains at the centre of this plan despite recent tenant losses, while South Africa and Brazil are seen as strong growth corridors.

Tenant churn in Nigeria

The biggest challenge in H1 came from tenant churn in Nigeria, driven by contract changes with MTN Nigeria, IHS’s largest customer. In late 2024, both parties renewed most of their master lease agreements until 2032. However, about 1,050 MTN tenancies were not extended, with MTN awarding those sites to American Tower Corporation following a competitive bidding process.

In Q1 2025, Nigeria’s tenant count dropped by 420 year-on-year, with new colocations and sites outweighed by churn. By Q2, the net decline had widened to 688 tenants year-on-year, still largely linked to the MTN shift.

Despite this, IHS maintained a Nigerian colocation rate (the price a data center charges to host servers or other IT equipment in its facility) of 1.52x, matching the average for emerging markets globally and indicating a healthy level of infrastructure sharing.

MTN’s strategic shift

MTN’s decision to diversify infrastructure partners reflects its push to modernise networks, cut costs, and spread operational risks. Contracts with IHS and ATC include pricing linked to inflation and diesel costs, with a mix of naira and dollar components to manage exposure to currency volatility.

The churn has been a setback for IHS, but the company’s retention of the bulk of MTN’s business—and its ability to fill sites with other tenants—has helped cushion the impact.

Strong financial performance

Despite lower spending and a reduced asset base, IHS posted resilient results in H1 2025. Q1 revenue rose 5.2% year-on-year to $439.6 million, with organic growth hitting 25.6%. Q2 revenue came in at $433.3 million, down 0.5% but ahead of market expectations.

For the half-year, revenue totalled about $872.9 million. Adjusted EBITDA reached $252.6 million in Q1 and $248.5 million in Q2, while net income improved to $30.7 million and $32.3 million, respectively, compared to last year’s loss. The results highlight the company’s ability to generate strong cash flows even in a leaner investment cycle. Management credits disciplined cost control, targeted reinvestment, and efficient contract management for the performance.

Outlook

IHS has reaffirmed its full-year revenue guidance, indicating confidence that the heaviest impact from MTN’s churn is now behind it. With a leaner portfolio, lower debt, and a sharper focus on its most profitable markets, the company believes it is better positioned to weather macroeconomic volatility, currency headwinds, and competitive pressures.

The second half of 2025 will test whether IHS can sustain this balance between capital discipline and growth, but H1suggests that the company’s pivot toward efficiency and financial resilience is already paying dividends.

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