JOHANNESBURG, South Africa-The new cellular strategy of Mohamed Ibrahim, telecom leader and chief executive officer of Mobile Systems International Cellular Investment Holdings (MSI Cellular), includes a plan to create a pan-African wireless network covering the whole of Africa from Cape Town, South Africa, to Cairo, Egypt.
Within a period of five months, Ibrahim has sold off MSI Cellular’s wireless operations in India, is about to sell those in Hong Kong, and is focusing his energies in Africa and the Middle East based on investment opportunities and Ibrahim’s vision of being part of the African renaissance.
Ibrahim was born in Sudan, and his ultimate mission is to return to Africa from his current home in London. Winning or losing the third cellular license in South Africa would not alter his plans, although as he said, a license win will be the next step in realizing his vision of connecting Africa through cellular technology and “implementing the dream of the African renaissance.”
After all, the African telecom industry currently is dominated by the South African market, which generates 40 percent of African telecom revenue (and equal to that of more than 40 sub-Saharan countries); has a customer base (more than 5 million) that totals 75 percent of total Africa; and has a 5-percent cellular penetration rate, compared with 0.05 percent overall in sub-Saharan countries, not including South Africa.
MSI Cellular, together with Telecel and Detecon, backed the Khuluma Cellular 084 consortium for the South African license. MSI Cellular Vice President of Operations Willem Luuk Nijdam soon will open a technical center in South Africa that will act as a hub for all the company’s African operations.
Said Nijdam: “MSI Cellular has committed well over US$200 million to Africa in the past two years in operations in 10 African countries-five of them are already fully functional in Egypt, Uganda, Zambia, Malawi and the Republic of Congo. In the next few months, we are planning to have up-and-running networks in Sierra Leone, Gabon, Chad, Guinea and the Democratic Republic of Congo.”
In February, MSI Cellular launched the first GSM service in Pointe Noire, the commercial center of the Republic of Congo. This extends the coverage from the capital, Brazzaville, where MSI Cellular’s Celtel network has been operational since third-quarter 1999.
In its active pursuit for licenses, MSI Cellular is bidding in Somalia and Nigeria. “We are undeterred by the escalating cost of license fees on the continent, for example in Kenya, were the second GSM license went to a bid of US$55 million and Nigeria asking US$100 million for each of the additional two new licenses,” said Nijdam.
License fees in Africa can vary from US$50 million to US$517 million (in Egypt). In its bids, MSI is opting for GSM technology only and where possible on the 400 MHz, 900 MHz and 1800 MHz spectrum bands.
The new office in South Africa, which will employ 9,000 people in the first two years, will have direct links to its headquarters in the Netherlands and offices in the United Kingdom. Investors behind the MSI African venture are based in the United Kingdom, the United States (GE Capital and AIG Inc.), Japan and Johannesburg, South Africa.
