Ghana Bets on Ambani-Backed 5G Firm to Cut Broadband Costs
Ghana, the West African nation recovering from a debt crisis, is banking on a high-speed broadband network supported by billionaire Mukesh Ambani to cut data costs and spur economic activity.
Next-Gen InfraCo. will start rolling out its first 5G network on Friday, Minister of Communications and Digitalization Ursula Owusu-Ekuful said in an interview. The goal is to achieve nationwide coverage by 2026, she said in a speech in the capital.
Accra-based NGIC aims to emulate the success of Ambani’s Reliance Jio Infocomm Ltd. in India. In 2016 Jio upended the nation’s telecom industry by starting low-cost data and free voice calling services, forcing a consolidation and luring subscribers. The company is credited for making mobile data affordable in the world’s most populous nation and in the process becoming India’s biggest mobile operator with 470 million users.
“We’re hoping that that would also democratize access to high-speed connectivity across the country,” Owusu-Ekuful said. “We know this will encourage businesses to sprout up in the countryside and not just in the big cities, and create economic zones, thereby providing more opportunities for entrepreneurs.”
The low-cost high-speed internet service is Ghana’s latest effort to invigorate business activity and give impetus to an economy recovering from the debt crisis. In July President Nana Akufo-Addo kicked off an 8.2 billion cedis ($503 million) program to extend cheap loans to small and medium-sized enterprises. Businesses in this segment account for 70% of gross domestic product, according to the finance ministry.
Economic growth quickened to 6.9% in the second quarter from 4.7% in the preceding three months but it was led by the mining sector. Annual growth in Africa’s biggest gold producer is yet to rebound to pre-pandemic levels of at least 6%.
NGIC, which acquired the spectrum from Ghanaian regulators at $125 million, has the exclusive rights to provide 5G network in Ghana for the next 10 years, an arrangement further expected to drive lower service charges, Owusu-Ekuful said. All other operators will lease from NGIC and serve their subscribers, she said.
The main players in the country of just over 33 million people are MTN Ghana, Telecel Ghana and AT, which changed its name from AirtelTigo last year after Bharti Airtel Ltd. and Millicom International Cellular SA sold their stakes.
Under the deal, Radisys Corp., a unit of Ambani-controlled Reliance Industries Ltd., will provide network infrastructure, applications and smartphones to NGIC.
Other partners include Nokia Oyj, Tech Mahindra Ltd. and Microsoft Corp. Two Accra-based firms — Ascend Digital Solutions Ltd. and K-NET — hold a combined stake of 55% in the company, the Ghanaian government owns a carried interest of 7.5% while local mobile operators and private investors will retain the remaining shares.
Internet penetration in Ghana stands at about 70%, a gap the government ambitiously targets to close in the next six years, Owusu-Ekuful said.
