Airtel Africa Plc has concluded a deal to extend its telecommunication tower lease agreements with the American Tower Corporation (ATC) across its subsidiaries in Uganda, Kenya, Nigeria and Niger by 12 years.

This is despite ongoing investigation by the Comesa competition watchdog over alleged anticompetitive behaviour, but officials say the new deals are independent of what is under probe.

Airtel Africa disclosed in its latest unaudited financial statements for the six months ended September 30, 2024 that it renewed its tower lease agreements with ATC for 7,100 sites across Nigeria, Uganda, Kenya and Niger. The agreements are set to expire in the next 12 to 24 months.“The renewals ensure we continue to benefit from contract structures, including the proportion that is linked to foreign currency,” the company says.“Integral to the contractual terms is the focus on renewable energy solutions across a significant number of sites, particularly in Nigeria. This is expected to benefit the Company’s operating costs in the medium term as the reliance on diesel is reduced, while also advancing Airtel Africa’s ambition to drive reduced GHG emissions across the footprint, which remains a key priority for its sustainability agenda.”The extension is expected to help Airtel Africa reduce the risks of network failures and increase the maximum amount of data transmitted over a network to effectively rollout the 5G network.

The deal is also expected to help the company reduce its operating expenses by focusing on renewable energy solutions across a significant number of sites.

But Comesa Competition Commission chief executive Dr Willard Mwemba told The EastAfrican in a telephone interview the Commission was still investigating the Airtel/ATC matter.“Currently, the Commission is engaging stakeholders in Kenya and Uganda to understand the market and the implementation of the agreements,” he said.“In the event that the Commission finds that the agreements are anticompetitive and infringe the Comesa Competition Regulations, it can order the parties to sever the anti-competitive clauses in the agreements if the agreements can be implemented without the offending clauses, or terminate the entire agreements if they are anti-competitive. The Commission can also impose a fine on the parties.”Airtel Africa said in an e-mailed response that it fully co-operates in the ongoing investigations and that the tower lease extension with ATC is independent of the investigation and reflects the outcome of commercial negotiations around its existing tower lease agreements that were set to expire in the next 12 to 24 months.

Emeka Oparah, Airtel Africa vice-president for Corporate Communications and CSR, said the latest agreement is the outcome of commercial negotiations around its existing tower lease agreements.

The Comesa competition watchdog in February this year launched investigations into alleged anti-competitive conduct by Airtel Africa and ATC after the two companies formed a “strategic partnership” that allowed ATC to develop new telecommunication sites for Airtel based on its (ATC’s) green site specifications to cut Airtel’s carbon footprint.

Read: Airtel, ATC under Comesa watchdog probe over towers dealThe complaint alleges that the deal is for Airtel to take up a certain amount of ATC sites annually and in return, ATC provides Airtel with a financial rebate, which is seen as anti-competitive.

The agreement was announced in October 2022 and was touted as a move to increase connectivity in Africa and extend digital inclusion while advancing both companies’ carbon emissions reduction objectives.

Under the agreement, all Airtel’s new connection sites in Kenya and Uganda (both Comesa members) and in Niger and Nigeria would be developed by ATC and old sites upgraded to the latest green site standards to cut emissions from the telco’s network towers.

The watchdog said it had received a complaint that a deal had contravened the trading bloc’s competition regulations.

Airtel Africa, which has operations in 14 African countries, says the extension of the lease agreements will result in about $1.2 billion increase in lease liabilities, translating into an increase in the company’s leverage ratio as of September 30, 2024.“The renewals reinforce our commitment to enhance network capacity and reliability, enabling our ambition to offer a best in-class network experience to our customers,” the company says.

The transaction is however expected to impact the group’s profit numbers by between $120 million and $130 million in the first year (2025), including an increase in finance costs and a 0.6 times increase in the group’s leverage ratio.

Airtel Africa’s tower lease agreements with ATC were originally entered as a sale and leaseback transaction in 2015/2016 for 10 years and were due for expiry over the next 12 to 24 months.

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