Asia’s richest man Mukesh Ambani is to enter Africa with a telecoms business, seeking to win mobile broadband customers in a high-growth market.
Radisys Corp., a unit of Reliance Industries Ltd. controlled by Ambani, will provide core network infrastructure, applications and smartphones for Next-Gen InfraCo. based in Ghana, according to Harkirit Singh, the executive director of NGIC. He outlined the plans ahead of NGIC’s launch announcement on Monday in Mumbai, India’s financial hub.
NGIC, which plans to start operations by the end of this year, will provide 5G broadband services to mobile operators and ISPs in Ghana.
The company “is built on a premise of creating affordable digital services in emerging markets,” Singh told Bloomberg News.
Other strategic partners at NGIC include Nokia Oyj, the Indian outsourcing partner company Tech Mahindra Ltd. and Microsoft Corp., which has increased its focus on telecom businesses after acquiring two cloud networking companies in 2020.
Ghana, a West African country with a population of just over 33 million, has three main providers: MTN Ghana, Vodafone Ghana and state-owned AirtelTigo. NGIC’s strategic partners, technology capabilities and the company’s possession of Ghana’s only 5G license will help it build broadband services at scale, a huge cost for individual mobile operators, Singh said.
Two African telecommunications companies β Ascend Digital Solutions Ltd. and K-NET β hold a combined 55% stake in the new company, Singh said. The Government of Ghana will own just under 10% of NGIC, while local mobile operators and private investors will retain the remaining shares in the company. Singh is also the CEO of Ascend.
NGIC has the exclusive right to offer 5G services in Ghana for a decade, although its license is valid for 15 years. The company’s three-year capital expenditures are $145 million, according to Singh.
The company is looking to emulate the success of Ambani’s Jio Infocomm Ltd. in India. Jio launched telecom services in India in late 2016 with low-cost data and free voice calls, forcing some competitors to close and others to consolidate. It is widely acknowledged to have made mobile data affordable to hundreds of millions of Indians. Jio is currently India’s largest mobile operator with 470 million users.
NGIC will provide “affordable mobile broadband services and devices to the people of Ghana, replicating the success of India’s low-cost mobile data revolution,” said Ghana’s Minister of Communications and Digitization Ursula Owusu-Ekuful.
The Reliance-NGIC partnership is also a diplomatic win for India, which has sought to counter China’s growing influence in Africa through measures such as digital inclusion.
None of the strategic partners, including Reliance, currently hold shares in NGIC. But the company will allow them to accept part of their payments as equity in the future, Singh said.
“First we have to be successful to show the value we create before they come,” Singh said. “That’s the conversation we’re having with them.”
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Posted: May 27, 2024, 08:08 AM IST