A deal for Asia’s second-richest man to cash in on 5G wireless service demand in Ghana faces opposition from the country’s parliamentary minority, which has accused the administration of rushing into a “sweetheart deal.”
The Ghanaian government’s plan to launch a 5G network using a company partnering with Mukesh Ambani is a bad deal for the debt-ridden nation, which needs funds for critical development projects, the National Democratic Congress (NDC) said in a statement on Monday.
The West African nation could have generated between $400 million and $500 million upfront if the government had opted for a formal bidding process, the minority caucus said in the statement. Instead, the caucus claims, the administration awarded a contract to the company known as Next Gen Infraco for $125 million paid in annual installments over 10 years.
“The NDC caucus in Parliament holds the view that at a time that the country is in dire need of foreign exchange and non-tax revenue, it is unconscionable that the government will hand over the precious and highly sought-after 5G spectrum of the country to a shell company for a pittance,” the caucus said in the statement.
Africa is home to the fastest-growing and youngest population in the world, with world powers such as the US, China and India vying for influence on the continent, despite challenges that include a lack of infrastructure and low-income customers.
Under the terms of the deal, Radisys Corp., a unit of Ambani-controlled Reliance Industries Ltd., will provide network infrastructure, applications and smartphones for Ghana-based NGIC. The deal gives NGIC and its strategic partners exclusive control over Ghana’s only 5G license for a decade.
Other partners in NGIC include Nokia Oyj, Indian outsourcer Tech Mahindra Ltd. and Microsoft Corp. Two lesser-known African telecom firms — Ascend Digital Solutions Ltd. and K-NET — hold a combined stake of 55% in the new company. The Ghanaian government owns roughly 10%.
A spokeswoman at the Ministry of Communications and Digitalization did not respond to telephone calls and a text message sent after business hours seeking comment. Ascend Digital Solutions and K-NET also did not immediately respond to requests for comment.
The venture aims to emulate the success of Ambani’s Jio Infocomm Ltd. in India. Jio launched telecom services there in late 2016 with low-cost data and free voice calling, forcing some rivals to shut down and others to consolidate. It is widely credited for making mobile data affordable to hundreds of millions of Indians. Jio is currently India’s biggest mobile operator with 470 million users.
Ghana’s government has set an ambitious target to digitally connect the entire country over the next six years. Ghana has a population of just over 33 million, and 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 sold their stakes.
Source: bloomberg