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Reliance Makes African Acquisition

Light Reading
News Analysis
Light Reading
2/21/2008

Reliance Communications Ltd. (RCom) , which runs India’s second largest mobile network, has made its first international mobile acquisition, in Africa. (See Reliance Buys Into Uganda.)

Reliance has acquired Anupam Global Soft (U) Ltd., a service provider license holder in Uganda, for an undisclosed sum and plans to invest $500 million over the next five years building an IP-based network there.

Anupam Global expects to launch GSM services by the end of the year. Reliance says it will also offer fixed-line, Internet, and long-distance services, and is looking to roll out WiMax and wireless LAN.

The move marks the beginning of Reliance's expansion into emerging Asian and African mobile markets. Africa provides fertile ground for acquisitive telcos as the fixed-line infrastructure is underdeveloped, telephone penetration remains low, and governments are increasingly liberalizing their markets, all creating huge potential for further growth.

Uganda had 4.2 million mobile subscribers and 162,263 fixed lines at the end of September 2007, according to the Uganda Communications Commission (UCC), in a population of around 30 million.

Reliance will be competing with fixed-line incumbent Uganda Telecom and its mobile subsidiary UT Mobile; MTN Group Ltd. ; and Celtel International B.V. On top of that, HiTs Telecom is also in the process of setting up operations in Uganda.

Reliance's FLAG subsidiary is already building a presence in Africa as part of its global NGN initiative. It's laying a submarine cable system that will provide the underserved continent with connectivity to the rest of the world, helping bring down the cost of providing communications in the region.

— Nicole Willing, Reporter, Light Reading

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