Ghana’s shared 5G model unlikely to alter market dynamics; 4G to remain dominant, says Fitch Solutions

Ghana’s Minister of Communications and Digitalisation has confirmed plans to build a wholesale 5G national network, rather than allocating individual 5G concessions to existing or new operators.

The new open access network will be constructed by a consortium of local entities and two players from India, alongside Nokia and Microsoft. The project aims to enhance digital inclusion through the provision of low-cost network infrastructure services in the sectors of education, healthcare, machine-to-machine (M2M) communication and payment services.

The initiative – which is emphasising the opportunity to minimise overall investments and thus keep costs low enough to permit affordability for all – is laudable, but we note that the wholesale open access network model has met with little success in other markets, most notably in Mexico where the state-owned Altan Redes 5G network has consistently operated at a loss and is technically bankrupt.

Fitch Solutions is also watching similar developments in Malaysia, where the Digital Nasional Berhad (DNB) project has fallen behind schedule. Established in March 2021, the project is being led by a special-purpose vehicle company owned by the government, which is collaborating with six mobile operators and service providers that have proved reluctant to participate. A change in government, issues with the vendor selection process and a decision to establish a second wholesale 5G network have further clouded the long-term sustainability outlook for the project.

In Ghana, Telecel Ghana and AT Ghana are both participating in the project as the Next-Gen Infrastructure Company (NGIC), which has been granted a licence to deploy and operate the shared 5G infrastructure. India-based Radisys (owned by market disruptor Reliance Jio) and Tech Mahindra are involved in the project. Additionally, Ghana-based Ascend Digital and K-Nat are also part of the consortium. The combined entities are reportedly planning to invest USD145mn in capital expenditures over the next three years.

There is limited information available on the vendor selection process from the government. MTN’s involvement has not been clearly outlined. It appears most likely that MTN will be required to use the shared infrastructure once there is no spectrum available for individual allocation. MTN remains the dominant market player in Ghana with 74.5% of the mobile market share at the end of March 2024.

Reliance Jio is looking to expand across the Sub-Saharan African (SSA) market, having stated its intention to replicate its high-speed mobile data model throughout the continent. The operator was reportedly selected based on its ability to rapidly develop infrastructure and the project aims to be completed within six months, with Ghana potentially being the first step in its international expansion.

This move could be part of the Indian government’s efforts to encourage infrastructure development in the SSA region, as evidenced by senior officials from India’s Department of Telecommunications (DoT) visiting countries including Angola, Gambia and Mauritius.

Despite this initiative, Fitch Solutions forecast that only 21.2% of connections will be 5G by 2033, with 4G expected to remain dominant due to handset costs, as 4G handsets are currently the most commercially accessible to consumers. Limited usage, even after 10 years, is likely to weigh on the project’s viability.