(Bloomberg) — Asia’s richest man, Mukesh Ambani, is expected to enter Africa with a telecommunications venture, seeking to win mobile broadband customers in a high-growth market.
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Radisys Corp., a unit of Ambani-controlled Reliance Industries Ltd., will provide critical network infrastructure, applications and smartphones to Ghana-based Next-Gen InfraCo., according to Harkirit Singh, chief executive officer of NGIC. He outlined the plans ahead of Monday’s NGIC launch announcement in Mumbai, India’s financial hub.
NGIC, which plans to begin operations by the end of this year, will provide 5G broadband services to mobile operators and internet service providers in Ghana.
The company “is built on the premise of building affordable digital services in emerging markets,” Singh told Bloomberg News.
Other strategic partners in NGIC include Nokia Oyj, Indian outsourcer Tech Mahindra Ltd. and Microsoft Corp., which has increasingly sharpened its focus on the telecommunications business following its 2020 acquisition of two cloud networking companies.
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Ghana, a West African country with a population of just over 33 million, has three main operators: MTN Ghana, Telecel Ghana and AT, which changed its name from AirtelTigo last year after Bharti Airtel Ltd and Millicom International Cellular SA sell their shares.
NGIC’s strategic partners, its technological capabilities and the company’s possession of Ghana’s only 5G license will help it build broadband services at scale, a huge expense for individual mobile operators, Singh said.
Two African telecommunications companies – Ascend Digital Solutions Ltd. and K-NET – hold a combined 55% stake in the new company, Singh said. The government of Ghana will hold just under 10% of NGIC, while local mobile operators and private investors will retain the remaining shares in the company. Singh is also the chief executive 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 expenditure is $145 million, according to Singh.
The company aims 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 rivals to close and others to consolidate. It is widely credited with making mobile data accessible 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,” Ghana’s Minister of Communications and Digitalization Ursula Owusu-Ekuful said in a statement .
The Reliance-NGIC partnership is also a diplomatic victory 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 have any equity stake in NGIC. But the company will give them the option 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 arrive,” said Singh. “That’s the discussion we’re having with them.”
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(Corrects company names in sixth paragraph.)
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