Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

MTN Group and Airtel Africa have signed a new network-infrastructure sharing deal to improve service coverage in two countries.

This new deal will save both telecommunication groups significant investments in mobile phone network infrastructure, while allowing them to still increase service coverage.

Both groups released official statements on Wednesday about the new deal, which takes effect in Nigeria and Uganda.

Recall that recent information shows that data subscribers in Nigeria have crossed 142 million.

The GSMA technology is at the forefront, accounting for more than 99% with 141 million subscribers, and MTN and Airtel are in the lead for mobile subscriptions.

Telecommunication companies have seen an increased demand for digital and financial services in Africa, especially for the faster 5G connections. However, it requires bulk funding to build and maintain the needed networks, hence the decision to partner.

This deal includes radio access network sharing, the largest portion of the cost of network deployment and operation, commercial and technical agreements for fibre infrastructure sharing; and, if necessary, the construction of fibre networks.

Channels News reports that while it is starting out with Nigeria and Uganda, the telecom giants have indicated plans to explore opportunities in other countries like Zambia, Rwanda, and Congo-Brazzaville, ChannelsTV News reports.

Importantly, too, the sharing deal does not stop the companies from partnering with other operators in the respective markets in which they operate.

Speaking about the new deal, Chief Executive Officer of Airtel Africa, Sunil Taldar, said that the deal would help both groups to avoid the expenses that accompany duplication of expensive infrastructure.

Taldar added that they would be able to expand operations quickly, especially in rural areas with a sparse population, where it is considered more economically viable to share network infrastructure.

MTN Group CEO, Ralph Mupita, also said in his statement that the regulatory frameworks create opportunities to partner to reduce costs and drive up efficiency and returns.

He added that the MTN Group is driven by a strong vision to deliver digital solutions that will power economic progress in Africa.

Recall that MTN Nigeria and Airtel Africa recently paid off $1.2 billion foreign debts to reduce their FX exposure.

In related news, MTN Nigeria and Airtel Africa are set to return to profitability in 2025, despite recording major FX losses last year.

MTN Nigeria has had two consistent years of reporting losses, without paying a single dividend to shareholders.

Analysts identified several factors that will push MTN and Airtel back into profitability, especially with the recent 50% tariff hike, and clearing off a huge chunk of foreign debts.

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Source: Legit.ng