IHS Towers Spending Slowdown May Hit Network Quality

IHS Towers is slowing infrastructure spending across its African markets as rising operating costs pressure telecom companies and threaten to slow improvements in network quality for mobile subscribers.

The tower operator reported capital expenditure of $41.4 million in the first quarter of 2026, down 5.3% from a year earlier. The company said it delayed some discretionary projects as it tightened spending.

At the same time, IHS reported a 5.6% rise in cost of sales to $183.6 million.

The slowdown could affect the pace of telecom expansion in markets such as Nigeria, where operators rely on tower companies to support mobile and internet coverage. IHS provides infrastructure used by telecom firms including MTN Nigeria, Airtel Nigeria and T2.

Tower companies support network rollouts by building and maintaining sites, fibre connections and power systems. When spending slows, operators may delay new towers, rural coverage projects and upgrades tied to 4G and 5G services.

Data demand in Nigeria continues to rise as more users stream videos, use fintech apps and work remotely. According to the Nigerian Communications Commission, the country had more than 153 million active internet subscriptions as of March 2026.

IHS said it is now focusing more on projects that can generate faster returns.

The company’s cautious approach reflects broader pressure across Africa’s telecom sector. Rising diesel prices, inflation and foreign exchange volatility have increased the cost of maintaining telecom infrastructure.

Nigeria remains IHS Towers’ biggest market. Spending in the country rose to $16.4 million in the quarter, compared with $11.2 million a year earlier.

The spending slowdown also comes during a major restructuring period for the company. Earlier this year, IHS agreed to sell its Latin American tower business to Macquarie Asset Management and its majority stake in I-Systems to TIM S.A. The company is also preparing for a proposed $2.2 billion acquisition by MTN Group.

Despite lower infrastructure spending, IHS reported stronger financial results. Revenue from continuing operations rose 6% to $415.4 million, while adjusted EBITDA increased 6.4% to $268.7 million.

The company’s total tower count fell to 37,641 after the disposal of its Rwanda business and the exit of some T2 sites under a restructuring agreement.

Still, IHS said underlying demand for telecom infrastructure remained stable, with the company adding 865 net new tenants over the past year, excluding disposals and tenant exits.