Radisys, a wholly-owned subsidiary of Reliance Jio Platforms, has announced plans to offer 4G and 5G shared network infrastructure technology in partnership with Next-Gen InfraCo (NGIC), a telecommunications company backed by the Government of Ghana, to customers and businesses in Ghana, with plans to expand to other countries across Africa in the coming years. Image: Shutterstock
eator decades now, the growth opportunities that business leaders, economists and investors have been anticipating from Africa – from pharmaceuticals to minerals and telecommunications, light manufacturing and digital services – have remained limitless. Last week, Radisys, a wholly-owned subsidiary of Reliance Jio Platforms, announced plans to offer joint 4G and 5G network infrastructure technology in partnership with Next-Gen InfraCo (NGIC), a telecommunications company backed by the government of Ghana. to customers and businesses in Ghana. with plans to expand to other countries across Africa in the coming years. It has raised the possibility that Jio will lock horns with Indian rival Bharti Airtel in Africa, where the latter provides telecom and mobile services. But, at least for now, that won’t happen. While the turf will be the same—and Airtel already operates in 14 African countries—Radisys with NGIC offers telecom infrastructure and reseller service, which is distinct from Airtel’s telecom and mobile service.
Africa contributed about 25 per cent to Airtel’s consolidated revenue for FY24 and, after a difficult start-up period where it had to raise debt to stay afloat and profitability became a concern, it managed to turn the business around. Costs were reduced and focused on providing 4G technology. It is the second largest telecommunications provider in Africa, after South Africa’s MTN, with 38 million Airtel Money customers.
What will Gio do?
NGIC will partner with local mobile network operators (MNOs) AT Ghana and Telecel Ghana, in addition to Radisys, Nokia and Tech Mahindra, which is a managed service provider (MSP) for the Microsoft Core Network. “NGIC aims to expand beyond Ghana by leveraging cloud and Open RAN (Radio Access Networks) technologies to create borderless networks,” says Harkirit Singh, CEO of Ascend Digital Solutions, which specializes in helps telcos build fixed and wireless network solutions.
The various partners provide the full stack of core infrastructure, RAN, devices, platforms and application ecosystems, enabling us to replicate the successful model created in India by Jio. “Our plan is to bring this proven model to Africa,” Singh said Forbes India.
An Open RAN infrastructure enables interoperability between cellular network equipment provided by different vendors. They can enter the market and offer telecom connectivity in the Ghana area.
NGIC has launched roadshows to raise $200 million from potential investors in the US, the Middle East, Asia and Europe. The capital will be used over a three-year period, with the first round of funding expected to close in August this year.
“The venture will provide 4G and 5G infrastructure—that means wireless equipment, base stations, radios and antennas. The aim is to expand coverage and capacity so that all mobile network operators can benefit from it,” Arun Bhikshesvaran, CEO of Radisys, told Forbes India. For 5G technology, NGIC has an exclusive license for 10 years through a national shared network.
As in India, Radisys and its partners are betting big on 5G technology for the African market. “We’re taking a modern approach: In this age, if you’re going to invest in infrastructure, you have to do it in a way that you get the best of what’s available today in terms of lifecycle management costs, network flexibility and separation software and hardware’.
“And make it useful for people—the devices have to be offered at the right affordable price structure. We’re not trying to build 5G networks to power iPhones to watch YouTube videos. It has a strong social purpose,” says Bhikshesvaran.
Also Read: Will Bharti Airtel take on Jio in spectrum auction?
Founded in the United States 38 years ago, Radisys specializes in three areas: communications services; fixed broadband and mobility (wireless). In India, Radisys operates in all three regions. “In communications services our software and hardware is installed in 200 operational networks worldwide and is part of all modern VoLTE networks. We connect with 2 billion subscribers on a daily basis,” says Bhikshesvaran.
So when you make a call as ringtone, announcements and conference, the software is powered by Radisys.
In fixed broadband, Radisys offers fiber-to-the-home, fiber-to-the-building technology where the hardware and software are used by Reliance Jio. It is involved in major FTTX projects with other customers worldwide, for example Deutsche Telekom in Germany.
India’s unlisted Radisys reported a 139 per cent rise in net profit to Rs 63.14 crore in FY23 on revenue from operations of Rs 848.64 crore, up over 50 per cent for the corresponding period of the previous year.
Africa: The usage gap
This venture seems to be well thought out. The journey spanned two years, driven by a strategy and vision to democratize mobility through meaningful connectivity. “We have identified three key imperatives: the availability of cloud technology and Open RAN to create a hyperscale telecom cloud, working with technology partners who share our vision of creating highly skilled jobs and providing affordable devices alongside platforms and services/applications” , Singh said Forbes India.
“The key challenge in the market is the usage gap, which requires more devices and an ecosystem of apps and platforms to drive consumption,” he says.
Airtel, which went into Africa as a telecom service provider, found a huge struggle in the early years. It only turned profitable in Africa in 2018, eight years after it had acquired the mobile operations of Kuwaiti mobile operator Zain in Africa for nearly $9 billion.
Airtel insiders will tell you that Africa offers huge opportunities, but that doesn’t mean it’s an easy market for business to monetize. “Africa always comes with its own nuances – repatriation of money is a concern, dealing with currency and currency devaluation is a concern,” says an industry source who used to work at Airtel. “Africa is a continent, not a country, the French-speaking region and the market is different from the English-speaking or the Afrikaans-speaking. It is still a Third World market, without the mature markets of Nigeria and Kenya,” he told Forbes India on condition of anonymity.
Bhikshesvaran does not agree. “If you enter a market after it has matured then you will be late. You have to be part of the change to get things done for society,” he says. NGIC will start in a phased manner, seeking to deploy 4G and 5G networks in Ghana’s capital Accra, in addition to the fixed wireless network.
Despite high mobile penetration rates (see Ghana snapshot table), 4G and 5G deployment in Ghana is hampered by a lack of competition in the market. NGIC aims to address this imbalance through a Network-as-a-Service (NaaS) model.
NGIC will partner with the Smart Africa Alliance, which includes 38 African countries and representation from the International Telecommunication Union (ITU), the African Union, the World Bank and others. “We believe the Ghanaian model will become a playbook for all member states, with at least 6-7 countries looking to replicate it,” says Singh.
Revenue generation and more
Capex towards 5G technology means that the need for MNOs to monetize this technology has increased. In India, hype for 5G technology has grown faster than its use. The technology is obviously useful—and has helped telcos like Jio and Airtel decongest their 4G networks—but there are very few use cases to test 5G’s capabilities.
The rollout of 5G in Africa will mean there will be a real challenge in monetizing this technology. Bhikshesvaran presents a realistic picture. “The question is, is there demand that can be captured and served well? The answer is yes. The demand is for broadband applications, experiences and services. This is undeniable.
What is the most efficient way to provide capacity to meet demand?” Bikeswaran asks. “It’s a combination of the spectrum available, the price for the devices and the best underlying technology you use to deliver that package. In 2024, it’s not efficient to build it on 2G or 3G technology, it has to be built on 4G and 5G.”
“There is no one-size-fits-all solution. In some frequency bands the ecosystem is different. In other frequency bands, the ecosystem is more suitable for 5G. It builds the underlying broadband infrastructure as a utility at the best possible price per gigabyte, both for capex and operating expenses,” he says.
There is no doubt about Jio and NGIC’s strategy to build a common telecom infrastructure ecosystem. If executed properly, it will encourage competition between MNOs and serve as a catalyst for digital entrepreneurs to develop local content. Their ability to design R&D, products and think like B2B players will also determine their success. Ultimately, of course, the test will be whether the venture turns out to be profitable.