LAGOS, May 14 – IHS Towers Ltd. cut capital expenditure in the first quarter as rising energy costs, inflation and foreign exchange volatility across key African markets forced the telecom infrastructure company to scale back parts of its expansion pipeline.
The company spent $41.4 million on capital projects during the period, a 5.3% decline from a year earlier, as it delayed selected tower builds, fibre rollout and power system upgrades while prioritising projects with quicker payback periods.
The pullback in spending came even as cost of sales rose 5.64% to $183.6 million, highlighting sustained operational pressure in markets where diesel prices, currency depreciation and maintenance expenses continue to weigh on margins.
The slowdown in investment could have implications for mobile operators including MTN Group, Airtel Africa and 9mobile, which depend on IHS infrastructure for network expansion. Reduced tower deployment may affect coverage rollout, network densification and the pace of 4G and 5G expansion, particularly in rural and underserved regions.
Nigeria, IHS’s largest market, bucked the broader trend, with capital expenditure rising to $16.4 million from $11.2 million a year earlier despite elevated energy and maintenance costs.
At the same time, the company is undergoing a broader strategic shift, including plans to divest its Latin American operations and a proposed $2.2 billion acquisition by MTN Group, expected later this year.
Despite lower investment activity, operational performance strengthened. Revenue from continuing operations increased 6% to $415.4 million, while adjusted earnings before interest, tax, depreciation and amortisation rose 6.4% to $268.7 million. Cash flow climbed 15.8% to $173.5 million, supported in part by lower interest expenses.
The company’s tower portfolio declined to 37,641 sites, down 1,571 year-on-year, largely due to the Rwanda asset disposal, while tenant numbers also fell following the exit of T2, formerly 9mobile.
With Nigeria’s mobile subscriptions exceeding 153 million as of March, according to the Nigerian Communications Commission, slower infrastructure expansion comes at a time of accelerating data consumption across the country.
