IHS Towers in LatAm: More sites and clients, lower revenues and capex

Telecoms infrastructure group IHS Towers expanded the number of towers and tenants for its sites in Latin America, but saw a reduction in revenue and capex related to regional operations.

The figures are from the company’s Q3 financial reports and presentation. In Latin America, the company operates in Brazil and Colombia.

Overall, IHS ended Q3 with 8,354 towers in place in Latin America, up 8.9% year-over-year. Of the total, 8,109 are in Brazil and 245 in Colombia.

During the quarter, IHS built 160 towers in the region, adding to 151 built in Q2 and 161 in Q1. Worldwide, IHS had 40,650 towers.

The number of tenants, that is, unique lessees for the sites in Latin America, grew by 6.5% to 10,812.  

Yet, revenue decreased 13% to US$45.1mn, as the group said it felt the hit from FX movements and a reduction in revenues of its customer Oi, which is undergoing judicial recovery.

Year-to-date revenue in Latin America decreased 4.4% to US$139mn.

Tenants and clients

During the quarter, the number of tenants increased by 657, including 793 from new sites and 236 from colocation (lessees at existing towers).

These were partially offset by 311 churned clients and by a net divestiture of 61, primarily due to the company’s disposal of its Peruvian assets, it said.

Its biggest Latin American clients are Brazil’s TIM, Vivo, Claro, accounting for 7%, 2% and 1% of global revenues. The biggestclients worldwide are MTN (62% of Q3 revenue) and Airtel (14%).

Other clients in Latin America include Oi’s fixed operation, Millicom’s Tigo, and Claro Colombia but each represents less than 1% of revenues.

On April 19, an Oi restructuring plan was presented to a court in Brazil and was agreed upon by creditors, including IHS. 

“As a result of the agreed upon terms, the carrying amount of the IHS Latam tower businesses group of [cash generating units] has been reduced to its recoverable amount, through the recognition of an impairment loss against goodwill,” said IHS. 

That impairment recognized was of U$87.9mn.

Debentures and capex

In June, IHS’s Brazilian subsidiary issued two sets of debentures, for 300mn reais (US$55.2mn) and 160mn reais. 

These debentures amortize, starting from July 2026 and November 2026, semi-annually until maturity in July 2032 and May 2032, respectively. 

Brazil is the group's second largest market after Nigeria, but the one where it is concentrating most of its construction and expansion efforts.

IHS revised its global capex outlook for the year, but upheld its guidance of deploying approximately 850 sites worldwide, of which around 600 in Brazil. 

The company is now targeting a capex range of US$270-300mn, versus a previous range of US$330mn-370mn. 

In Q3, total capex was US$66.5mn, down from US$100mn a year ago. 

Latin America capex declined the most, by 44.2% to US$31.7mn.