Mukesh Ambani, Asia's richest man, is making a significant foray into Africa's telecom sector through a new venture aimed at capturing the mobile broadband market in the rapidly growing region, according to Bloomberg. Reliance Industries Ltd., controlled by Ambani, will spearhead this venture through its subsidiary, Radisys Corp.
The company will provide essential network infrastructure, applications, and smartphones for Ghana-based Next-Gen InfraCo (NGIC). This announcement was made by Harkirit Singh, NGIC's Executive Director, ahead of the company's formal launch on Monday in Mumbai.
NGIC plans to commence operations by the end of this year, offering 5G broadband services to mobile operators and internet service providers across Ghana. Singh highlighted that the venture aims to deliver affordable digital services in emerging markets.
Strategic partners in this initiative include Nokia Oyj, Indian outsourcing giant Tech Mahindra Ltd., and Microsoft Corp., which has been intensifying its focus on the telecom sector following its acquisition of two Cloud networking firms in 2020.
Ghana, a West African nation with a population exceeding 33 million, currently has three main telecom operators: MTN Ghana, Vodafone Ghana, and state-run AirtelTigo. NGIC's technological capabilities and possession of Ghana’s only 5G license position it to offer large-scale broadband services, a costly endeavour for individual mobile carriers, Singh noted.
Two African telecom firms, Ascend Digital Solutions Ltd. and K-NET, hold a combined 55 per cent stake in NGIC. The Ghanaian government owns just under 10 per cent, while the remaining shares are held by local mobile operators and private investors. Singh, who is also the CEO of Ascend, revealed that NGIC has an exclusive right to provide 5G services in Ghana for a decade under a 15-year license. The company's capital expenditure for the first three years is projected at $145 million.
NGIC aims to replicate the success of Reliance's Jio Infocomm Ltd. in India. Launched in late 2016, Jio revolutionised the Indian telecom market with low-cost data and free voice calling, which forced many competitors to shut down or consolidate. Jio is now India's largest mobile operator, with 470 million users.
Ghana’s Minister for Communications and Digitalisation, Ursula Owusu-Ekuful, expressed optimism about the venture, stating that NGIC will bring affordable mobile broadband services and devices to Ghana, mirroring India’s mobile data revolution.
The Reliance-NGIC collaboration is also seen as a diplomatic victory for India, as it seeks to counter China's growing influence in Africa through initiatives like digital inclusion.
Currently, none of NGIC's strategic partners, including Reliance, hold equity in the company. However, Singh mentioned that they might have the option to accept part of their payments as equity in the future. "We need to demonstrate the value we create before they come in," Singh said, reflecting ongoing discussions with the partners.