Telecoms joint venture deal set to boost connectivity across Ghana

The firms said the new business would serve nearly 10 million customers, of which 5.6 million are data customers and cover “more than 80% of Ghana’s population with high speed data, providing the widest 3G coverage across the country”.

Revenues of the new venture, which will be launched subject to regulatory approvals and customary closing conditions, are expected to be “close to $300 million, making it one of the largest communications companies in Ghana”, the companies said.

Millicom Africa executive vice-president Mohamed Dabbour said the deal represented “a major milestone for our business in Ghana in a highly fragmented telecoms market”. He said: “This transaction underlines confidence in the Ghanaian economy and provides the opportunity to develop nationwide digital infrastructure and services in Ghana.”

Airtel Africa chief executive officer and managing director Raghunath Mandava said the “coming together of the two entities will benefit customers, who can now enjoy an extensive combined network and a wider range of affordable and innovative products and services”.

The companies said the deal will provide Ghanaian customers “with a major boost in both rural and urban network coverage – in turn translating into better voice quality, high speed data services and reinforced network stability and resilience”. Mobile financial services are also “expected to be greatly enhanced with combined agent networks and platforms”, the companies said.

Telecoms expert Diane Mullenex of Pinsent Masons, the law firm behind Out-Law.com, said: “The combined operations of telecoms giants, Millicom and Airtel, will be a big step forward for connectivity in Ghana.”

“Increasing the availability of stable and reliable data connections is essential to development in sub-Saharan Africa,” Mullenex said. “Airtel has frequently explored consolidation opportunities across the globe. Its newest joint venture with Millicom will be welcomed by 10 million users who will benefit from the integrated networks and high speed 3G coverage in Ghana.”

In March 2016, the World Bank’s International Finance Corporation (IFC) said it had signed an advisory agreement with Fidelity Bank Ghana aimed at expanding agent and mobile banking in Ghana. “As part of the three-year advisory project, IFC will provide Fidelity Bank with strategic and technical advice for the expansion of the agent banking service,” the IFC said.

A report published last year by the global mobile operators' association GSMA (73-page / 7.83 MB PDF) said “sub-Saharan Africa continues to account for the majority of live mobile money services (52%)”. GSMA said growth in mobile money services in 2015 across West Africa “was dramatic”, with Ghana among those countries “contributing to the substantive regional turnaround”. “In 2015, year-on-year growth in active (mobile money) agents was 60.1%, which was twice the growth rate of any other region.”