IHS plans 400 new sites in Brazil in 2025, more asset disposals

Telecom infrastructure firm IHS Towers plans to build around 400 new sites in Latin America this year and raise up to US$1bn through global asset disposals as it seeks to expand its footprint while improving profitability, company executives told investors during an earnings call.

The company’s 2025 guidance reflects a slightly more optimistic business outlook compared with 2024, including in Latin America.

Currently, IHS operates primarily in Brazil as well as Colombia. Last year, the company sold its operations in Peru and exited the Andean country.

All 400 new sites planned for Latin America in 2025 will be built in Brazil, which is IHS’s second-largest global market, with 8,326 towers. These new towers will account for 80% of the 500 sites planned worldwide this year. However, overall construction projections for 2025 are lower than those for 2024.

Like Peru, IHS's Colombian operations are relatively small, with just 253 towers – the smallest portfolio among the eight countries where the group operates.

IHS’s three main clients (tenants) are Claro, Tigo and Avantel. The latter was acquired in 2021 by WOM, which is currently undergoing a restructuring process in the country. IHS holds a 2% share of the Colombian tower market.

The company has not disclosed in which markets it is currently negotiating asset disposals. However, it has previously acknowledged the possibility of divesting its Colombian operations, a market recently exited by rival SBA.

Last year, reports indicated that IHS was also seeking investors for its Brazilian operations. However, Brazil remains the company’s strongest market, driving much of its growth. In 4Q24, for example, 217 of the 313 new towers IHS built worldwide were in Brazil.

The company is among the leading tower builders in Brazil, with dominant telcos Vivo, Claro and TIM as its core tenants. IHS holds a 12% share of the Brazilian tower market. 

Brazilian outlook

"Brazil has had a bit more macroeconomic softness in the last quarter or two. But even there, we're seeing some fundamental dynamics have shifted in the last six to 12 months, which hopefully lead to a much more positive near-term outlook," CFO Steve Howden said, referring to recent foreign exchange, interest rate and inflation challenges.

The company’s cautious optimism for Brazil is tied to the conclusion of negotiations involving the transfer of operator Oi’s towers to other local telcos, as well as a new wave of demand linked to 5G expansion.

"We've been going through our workings with Oi and as of some of the other telcos as well and that's kind of coming to a conclusion now. And what we're seeing is plenty of the carriers are looking at substantial 5G rollout. So although Brazil and LatAm have been a bit softer in quarters, we can see where it could go and it's a positive longer-term picture," Howden added.

Divestments

IHS is "working hard" to achieve US$500mn to US$1bn in asset disposals in the near term.

A mix of approaches is being considered. According to Howden, the divestment process may involve selling minority stakes in certain assets as well as complete operational exits.

"We're looking to highlight the value of IHS versus its share price performance. We're looking at a number of different opportunities and we'll keep people updated," he said.

CEO Sam Darwish explained that the company’s strategic review is driven in part by the belief that IHS remains undervalued.

"We've sold a couple of asset portfolios at almost three times the multiples we're given by the public markets," Darwish said.

Performance and portfolio

In IHS’s Latin America segment, towers and tenants grew by 7.9% and 7.2%, respectively, year-on-year in 4Q24.

Latin American revenue, however, declined by 18%, which the company attributed to negative foreign exchange movements and reduced revenue recognition from Oi following the telco’s judicial recovery process in early 2024.

Despite this, Darwish stated that exposure to the Brazilian telco now accounts for less than 1% of IHS’s portfolio. He also noted that all of the company's tower contracts have been renewed into the 2030s, covering between US$12bn-13bn in contracted revenue.

At the end of Q4, IHS reported a net decrease of 846 towers year-on-year (or a net increase of 896 towers when excluding the impact of tower disposals in Kuwait and Peru), bringing its total tower count to 39,229.

IHS claims to be the fifth-largest independent tower company worldwide in terms of site count, following American Tower, Cellnex, GD Towers and SBA.

The company attributed the overall decline primarily to the divestiture of 1,678 towers in Kuwait and 64 in Peru.

Meanwhile, the addition of 929 new sites was partially offset by the churn of 250 towers (due to customers switching providers) and the decommissioning of 15 towers.

The company’s full-year capex declined due to lower expenditures across all segments.

In Latin America, the decline was driven by reduced fiber-related investments and new site capex, despite a strong pace of new site deployments in Brazil.