IHS Holding Ltd (NYSE: IHS)

IHS Holding Limited, also known as IHS Towers, is a prominent player in the global telecommunications industry, specializing in the ownership, operation, and development of shared communications infrastructure. The company facilitates mobile communications coverage and connectivity for approximately 780 million people across three regions and eleven countries.

IHS Towers operates in a dynamic and competitive industry, providing essential infrastructure services to mobile network operators (MNOs) and other customers. The company's business model revolves around the provision of shared communications infrastructure services, generating revenue through various products and services. These offerings include Tower leasing, Colocation, Lease Amendments, New Sites, Fiber-to-the-Home (FTTH), Fiber-to-the-Tower (FTTT), and in-building solutions (IBS) or distributed antenna systems (DAS).

The company's success is underpinned by its significant market scale, substantial and defensible market share, and proven business model. IHS Towers has contractual protections against macroeconomic volatility, ensuring a high degree of revenue visibility. Its long-term contracts with MNOs often include inflation-linked revenue escalators and power indexation clauses, mitigating risks associated with diesel price increases and foreign exchange fluctuations.

IHS Towers' competitive edge is further bolstered by its track record of both organic and inorganic growth. The company has maintained its market share and expanded its operations through strategic acquisitions and partnerships. Its ability to add new Tenants and Lease Amendments via Colocation has enabled it to improve margins and return on invested capital.

Operating in Africa, Latin America, and the Middle East, IHS Towers is one of the largest independent multinational tower operators globally. The company holds a leadership position in the majority of its current markets, boasting a high-quality asset base and service. This position is reinforced by long-term contracts with MNOs, including key customers in Nigeria, Cameroon, and Côte d'Ivoire.

IHS Towers' customer base primarily consists of leading MNOs such as MTN Group, Airtel Africa, Orange Group, Telecom Italia, Zain Group, America Movil, Telefonica, and Millicom. The company's revenue is heavily dependent on a small number of MNOs, making non-performance, termination, non-renewal, or material modification of customer lease agreements a potential risk to its business, prospects, financial condition, and results of operations.

In terms of its portfolio, as of December 31, 2023, IHS Towers owned 36,079 Towers and operated 3,996 additional Towers under MLL and ROU arrangements, totaling 40,075 Towers. The company's Colocation Rate, representing the average number of Tenants per Tower, stood at 1.49x as of the same date. This metric is crucial for assessing utilization and capacity on existing Towers, as well as potential for future growth. It also significantly influences the company's gross margins and operating margins.

IHS Towers' Towers typically consist of ground-based structures designed to support a large number of antennae. This enables the company to market tower space to a diverse group of telecommunications providers and other customers. The structure of the Tower can be reinforced, and the foundation strengthened to accommodate additional Tenants and Lease Amendments.