IHS Nigeria, the tower infrastructure used by most mobile network operators in Nigeria including MTN and Airtel, generated $359.4 million in revenue in the third quarter of 2026, a 34.1% increase from $268 million recorded in the corresponding period last year.
The increase in revenue came despite higher operating expenses, particularly the cost of generating electricity to keep its telecommunications towers running.
This is according to IHS Holding Limited’s third-quarter financial results filed with the United States Securities and Exchange Commission (SEC) on November 10 which showed that the Nigerian business contributed 73.3% of IHS Towers’ $490.5 million revenue from continuing operations during the quarter, highlighting the country’s importance to the group’s financial performance.
The Nigerian segment also recorded a 26.8% increase in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) to $215 million, compared with $169.6 million a year earlier.
Higher power costs meet stronger revenue
IHS reported that power generation costs in Nigeria increased by $38.8 million year-on-year during the third quarter, largely because of higher global power prices, including those linked to the conflict in the Middle East.
“During the third quarter the increase in costs was primarily driven by a year-on-year increase in power generation costs ($38.8 million), as a result of higher global power prices due to reasons including the conflict in the Middle East,” the firm said in its financial statement.
Tower companies require a reliable electricity supply to keep the infrastructure used by mobile network operators running around the clock. Where grid supply is unreliable, they rely on generators and other power solutions, making diesel prices a significant part of their operating expenses.
For IHS, however, higher diesel prices also boosted revenue. Under contractual power pass-through and indexation mechanisms—which either bill telecom clients directly for actual site fuel consumption or tie lease fees to benchmark energy prices—the company recovers rising energy costs through automatic upward adjustments to customer charges.
While these clauses helped offset Q3’s $38.8 million jump in Nigerian power expenses, billing lags mean they do not always neutralize the full cost impact immediately.
Beyond energy costs, IHS recorded a $3.8 million increase in staff costs and a $2.4 million increase in tower repair and maintenance expenses.
Currency movements also played a significant role in the Nigerian business’s reported performance. The average exchange rate used to translate its results into US dollars improved to N1,352 per dollar in the third quarter of 2026, compared with N1,523 per dollar in the same period of 2025.
IHS said the naira’s appreciation contributed a $40.7 million increase in non-core revenue, representing a 15.2% year-on-year rise. The currency movement also positively affected the Nigerian segment’s adjusted EBITDA by $24.1 million.
The company’s network activity provided another source of growth. IHS recorded a net increase of 120 tenants during the quarter, comprising 497 additions from colocation and one from new sites, partly offset by the loss of 378 tenants.
Colocation allows multiple mobile network operators to install equipment on the same tower, generating additional revenue for the infrastructure provider without requiring a completely new site for each customer. Lease amendments also increased by 5,768 during the period, reflecting additional services and equipment requirements from existing tenants.
The combined effect of revenue growth and higher operating costs resulted in Nigerian adjusted EBITDA of $215 million, with a margin of 59.8%.
Group revenue grows as IHS reports $8.2m loss
At group level, IHS Towers recorded $490.5 million in revenue from continuing operations, an increase of 21.4% from $403.9 million in the third quarter of 2025.
Group adjusted EBITDA rose by 8.1% to $282.7 million, compared with $261.5 million a year earlier. Adjusted levered free cash flow also increased by 25.3% to $197.7 million.
However, the company reported a loss of $8.2 million for the quarter, compared with income of $147.4 million in the corresponding period last year.
The weaker result reflected higher operating expenses and financing costs. Cost of sales increased by $48.2 million, while administrative expenses rose by $88.4 million.
Part of the increase in administrative expenses came from $49.1 million in accelerated share-based payments and long-term employee benefit expenses linked to changes in expected vesting periods and settlement obligations following the proposed acquisition by MTN Group.
The results come as MTN Group continues to pursue its proposed $6.2 billion acquisition of IHS Towers. IHS Chairman and Chief Executive Officer Sam Darwish said the transaction continued to advance during the quarter and was still expected to close in 2026, subject to the remaining closing conditions.
MTN shareholders approved the proposed acquisition of the remaining shares in IHS in August 2026, bringing the telecoms group closer to taking full ownership of the tower operator.
The transaction has also received conditional approval from Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC), which requires MTN to eventually sell up to 30% of the Nigerian component of IHS to other investors at market prices.
That condition has prompted MTN to explore interest from Nigerian investors for the stake, which could be worth between $900 million and $1.1 billion, according to earlier reports. The proposed sell-down is intended to address the competition concerns associated with MTN taking control of a major infrastructure provider that also serves other telecom operators.
For IHS, the latest results underline the importance of its Nigerian operations to group revenue and earnings. While higher power costs continue to put pressure on operations, revenue recovery mechanisms, additional tower tenants and favourable currency translation supported growth during the quarter. The proposed acquisition by MTN also remains a major development shaping the company’s next phase.
