Mukesh Ambani Eyes African Market with New Telecom Venture
Asia’s richest man, Mukesh Ambani, is poised to expand into Africa with a new telecom venture aimed at capturing mobile broadband customers in a rapidly growing market. Harkirit Singh, the Executive Director of NGIC, revealed that Radisys Corp, a subsidiary of Ambani-controlled Reliance Industries Ltd, will supply essential network infrastructure, applications, and smartphones for Ghana-based Next-Gen InfraCo. Singh detailed these plans ahead of NGIC’s upcoming launch announcement in Mumbai, India’s financial capital.
NGIC plans to launch operations by year-end, providing 5G broadband services to mobile operators and internet service providers in Ghana. The company “is based on a premise of building affordable digital services in emerging markets”, Singh said.
NGIC's strategic partners include Nokia Oyj, Indian outsourcing firm Tech Mahindra Ltd., and Microsoft Corp., which has intensified its focus on the telecom sector following its 2020 acquisition of two cloud networking companies. Ghana, a West African nation with a population of just over 33 million, is currently served by three major operators: MTN Ghana, Vodafone Ghana, and the state-owned AirtelTigo. According to Singh, NGIC's partnerships, advanced technology, and exclusive possession of Ghana's only 5G license will enable it to develop broadband services at scale, an endeavor that would be prohibitively expensive for individual mobile carriers.
Two African telecoms firms Ascend Digital Solutions Ltd. and K-NET hold a combined stake of 55% in the new company, said Singh. The Ghana government will own just under 10% of NGIC, while local mobile operators and private investors will retain the remaining shares in the firm. Singh is also the chief executive of Ascend. NGIC has the exclusive right to offer 5G services in Ghana for a decade, though its license is valid for 15 years. The company’s capital expenditure for three years is $145 million, according to Singh.
The company aims to replicate the success of Ambani’s Jio Infocomm Ltd in India. Jio launched its telecom services in late 2016, offering low-cost data and free voice calling, which led to the shutdown of some competitors and the consolidation of others. It is widely recognized for making mobile data affordable for hundreds of millions of Indians. Today, Jio is India's largest mobile operator, boasting 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 for Communications and Digitalization Ursula Owusu-Ekuful said in a statement. The partnership between Reliance and NGIC is also a diplomatic victory for India, which aims to counter China’s increasing influence in Africa through measures such as digital inclusion.
None of the strategic partners, including Reliance, currently own any equity in NGIC. But the company will give them an option to accept part of their payments as equity in the future, Singh said. “First we have to be successful to show the value that we create before they come in”, Singh said. “That’s the discussion we’re having with them”.
