Ambani Eyes African Expansion with New Telecom Venture

Reliance Industries to Bring Affordable 5G Services to Ghana

May 27, 2024 - 07:15
May 27, 2024 - 07:15
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Ambani Eyes African Expansion with New Telecom Venture
Ambani Eyes African Expansion with New Telecom Venture

Mukesh Ambani, Asia’s richest man, is set to expand into Africa with a new telecom venture targeting mobile broadband customers in a fast-growing market. Radisys Corp., a subsidiary of Ambani’s Reliance Industries Ltd., will supply crucial network infrastructure, applications, and smartphones to Ghana-based Next-Gen InfraCo. (NGIC), according to Harkirit Singh, NGIC's executive director. Singh revealed these plans ahead of NGIC’s launch announcement set for Monday in Mumbai, India’s financial center.

NGIC's Operations and Goals

NGIC aims to start its services by the end of this year, providing 5G broadband to mobile operators and internet service providers in Ghana. Singh stated that the company’s mission is to create affordable digital services in emerging markets.

Strategic Partnerships and Technological Advantage

NGIC has formed alliances with major technology firms, including Nokia Oyj, Indian outsourcing company Tech Mahindra Ltd., and Microsoft Corp., which has increased its focus on the telecom sector after acquiring two cloud networking companies in 2020.

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Telecom Landscape in Ghana

Ghana, with over 33 million residents, currently has three main telecom operators: MTN Ghana, Telecel Ghana, and AT (previously AirtelTigo). NGIC’s strategic partnerships and exclusive 5G license position it to build large-scale broadband services, a costly endeavor for individual mobile carriers, according to Singh.

Investment and Ownership Structure

African telecom companies Ascend Digital Solutions Ltd. and K-NET hold a combined 55% stake in NGIC. The Ghanaian government will own just under 10%, while local mobile operators and private investors will hold the remaining shares. Singh, who is also the CEO of Ascend, mentioned that NGIC has exclusive rights to provide 5G services in Ghana for ten years, with the license being valid for 15 years. The company plans to invest $145 million in capital expenditures over the next three years.

Ambani’s Vision for NGIC

Ambani seeks to replicate the success of his Jio Infocomm Ltd. in India, which transformed the telecom market by launching in 2016 with low-cost data and free voice calls. Jio's competitive pricing led to many rivals either closing down or merging, making mobile data affordable for hundreds of millions of Indians. Today, Jio is India's largest mobile operator with 470 million users.

Local and International Significance

NGIC aims to provide affordable mobile broadband services and devices to Ghanaians, replicating the success of Jio’s low-cost data strategy in India, according to Ghana’s Minister for Communications and Digitalization, Ursula Owusu-Ekuful, in a statement. The partnership between Reliance and NGIC is also a diplomatic win for India, which aims to counter China’s increasing influence in Africa through initiatives like digital inclusion.

Future Equity Options for Partners

Currently, none of NGIC's strategic partners, including Reliance, hold equity in the company. However, NGIC plans to offer them the option to receive part of their payments as equity in the future, Singh said. "We need to demonstrate success and the value we create before they join in," he added. "That’s the discussion we’re having with them."

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