Dr Mo: The Cellular Choice

28 May 2003
Content from our Premium Partner
Celtel (Amsterdam)
press release

Amsterdam — As a mobile phone operator having set up its business south of the Sahara, MSI Cellular Investments (MSI) claims its African identity and origins.

MSI, whose founder is Dr Mohamed Ibrahim, has quickly become a key actor in the business. Born in Sudan in 1946, Mo Ibrahim lived in Egypt where he started engineering studies. He pursued them in Britain where he specialised in mobile telephony. In the early 80s he became technical manager for Cellnet, a subsidiary of British Telecom, which launched the first cellular telephone network in the world. In 1989, he founded his own consulting firm, Mobile Systems International (MSI) and created a software package, Planet, which makes it possible to optimise the design of cellular telephone networks. MSI, with its high-tech products, advises customers in Europe, Asia and America.

Africa hasn't been left out. In 1998, Dr Ibrahim opened a subsidiary in Amsterdam, MSI-Cellular Investments, which was to be devoted to developing GSM networks on the continent. The first site was to be Uganda. MSI-CI is now present in thirteen African countries south of the Sahara. Dr. Mo's strategy has proved to be successful because the company has experienced a more than 40% annual growth rate. MSI-CI has strong support from a panel of investors.

MSI's good performance in a sector now in difficulty is certainly due to very strong marketing and promotion campaigns but also and mainly to the creation of new services adapted to local realities. The latest one, Celpay, a kind of electronic purse, has been tried out in Zambia and should prove to be very popular. Trade in developing countries suffers from almost non-existent means of payment apart from cash. A secure and almost immediate payment method has been created using mobile telephones. After a successful trial, MSI has decided to extend the product to other countries.

You have devoted your professional life to mobile telephony. Is this by chance?

MOHAMED IBRAHIM: No, it isn't. I have developed a real passion for this job. I've been working on the conception of mobile phone networks since the beginning of my career. I took a PHD in the subject in the 70s.

How do you reckon MSI as opposed to its rivals?

MSI has a unique position. A lot of multinationals have activities in Africa but our strategy is to be an African company, with the will to set up a pan-African network. We have decided to keep the same name, Celtel, in the various countries where we operate. We are aware that colonialism has set up political frontiers which divide communities. Our wish is to link those communities again to each other. The people from the various countries must communicate. For example, we have set up radio links between the two Congos at an exceptional rate which is equivalent to the local rate. We found it absurd to have the communications pass through Europe to link Kinshasa and Brazzaville, the closest two capitals in the world. The African market really suffers from a lack of communication infrastructure, and the cost of installation of a network is very high there. That is why Celtel could benefit from the know-how and expertise of MSI, which has developed tools for setting up as many networks as possible.

Do you wish to have a better cooperation with your rivals?

Why not? We could, for example, share telecommunications infrastructure and set up interconnections between networks. Having better infrastructure at a lower cost would be absolutely profitable, especially in countries with reduced investments. We sometimes manage to do so, but it is still difficult because some operators are only interested in short-term profits. As a result, there is a proliferation of relay aerials. When we set up a transmission link, we allow other operators to lease space and capacity where appropriate. Congo-Brazzaville is a model of success. The radio link communication network between Brazzaville and Pointe-Noire, which was set up by Celtel, is being used by various operators.

The mobile phone companies are up to the ears in debt. Is it still a good idea to invest in the sector?

Yes it is. Our partners have seen the pertinence of our long-term strategy. That is why we have recently completed the placing of fresh funding of 117 million dollars. MSI's shares were worth 2 dollars each at the beginning. Now they are worth 15 dollars. In the meantime, the shares in the telecommunications sector have lost more than 60% of their initial value. If things go well, we hope to obtain a listing on the stock exchange in 2005.

Will the mobile phone remain your number one activity?

The mobile phone is very popular in Africa. We created the same infrastructure and equipment in Africa as in Europe, which makes that continent take many technical steps at once. We very much believe in the development of new services like Celpay. In classical telephony, the situation is more complicated. We have invested in two ordinary telephone companies so far, in Tanzania and Sudan. In Tanzania, we have established the pre-payment system, which is new for fixed telephony, and we are developing additional services like teleconference and Internet. But we must evaluate those experiences before going any further.

MSI is investing in humanitarian projects. Is this a marketing operation?

We invest nearly 4 million dollars per year in education and health programmes, especially in the fight against AIDS. We intervene in countries which have gone through devastating conflicts. But we are not trying to value those actions from a marketing point of view.

How do you foresee the future?

I have confidence in the development potential of Africa. We have invested 500 million dollars on the continent so far, not to mention the benefits we have re-invested on the spot. Our objective is to supply Africans with European standards of products and serevices. We may capitalize on our know-how one day on other continents, but our priority is to build a strong Africa.


The holding company MSI Cellular Investments, which was created five years ago, is present in the mobile telephony sector under the brand name "Celtel" in thirteen African countries, through its subsidiaries: Burkina Faso, Congo-Brazzaville, Gabon, Guinea, Malawi, Niger, Uganda, DR Congo, Sierra Leone, Sudan, Tanzania, Chad and Zambia. MSI-CI has shares in two fixed telephony companies in Sudan and Tanzania. Besides, MSI acquired LinkAfrica in 2002, an optic fibre and satellite long distance link supplier.

MSI's turnover was 300 million dollars in 2002, being an increase of nearly 60% over 2001. Pre-tax profits were estimated at 80 million dollars in 2002, funded by debt of 171 million dollars. MSI employs more than 1,400 people of whom about sixty at the head-offices in London and Amsterdam, and only about fifty expatriates.

Notes to Editors

MSI has been licensed by 12 Governments in Africa, representing more than one-third of the population of the African continent, to operate GSM cellular networks, which are mainly branded "Celtel".

MSI has operations in Uganda, Zambia, Malawi, the Republic of Congo ("Congo Brazzaville"), Gabon, Sierra Leone, Chad, Burkina Faso and Democratic Republic of Congo ("Congo Kinshasa"), Sudan and Niger. In Tanzania, MSI has a 35% equity stake and management control of Tanzania Telecommunications Company Limited (TTCL). TTCL launched the Celtel Tanzania cellular network as an independent subsidiary company. In Egypt, MSI is a founding shareholder and minority partner in Vodafone Egypt.

Shareholders in MSI include:

- CDC Capital Partners, a leading risk capital investor in emerging markets, with over US$1.5 billion invested in some 50 emerging countries. -

- IFC (International Finance Corporation) the private sector arm of the World Bank and the largest source of private equity for developing countries. -

- AIG Infrastructure Fund, sponsored by AIG and managed by EMP, the largest private equity infrastructure manager in emerging markets with nearly US$5 billion under management. -

- Zephyr Asset Management, the US based emerging market fund. -

- Citigroup, the global financial services group. -

- Bessemer Venture Partners, the investment arm of one of the oldest funds in the USA. -

- Palio, the Swiss technology investment company. -

- FMO, the Dutch development institution and DEG, the German development institution. -

- Old Mutual Asset Management in South Africa. -

Visit MSI's website on www.msi-cellular.com.


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