Africa’s Pioneer Telecoms Mogul: Mo Ibrahim

Mo Ibrahim

Several years ago, Mo Ibrahim, the unassuming Sudanese-born engineer and Telecoms tycoon introduced Africans to the world of mobile communications. He is now investing his resources towards developing a pipeline of effective and ethical African leaders for future generations.

VENTURES AFRICA – It was in the early 70’s when Mo Ibrahim stumbled on the breakthrough idea that birthed a global revolution in mobile communications. Ibrahim, a young engineer at the time, was attending an International Telecommunications Union (ITU) training programme at its headquarters in Geneva-Switzerland. During a journey in a taxi through the city centre, Ibrahim discovered that his taxi driver was using a public radio system in his car in a built-up area without being in direct sight of a satellite.

He had never seen this before, but he realised that he could apply what he had just seen on an audacious mobile communications project he was working on. At the time, he was working as a mobile communications engineer for British Telecoms (BT), and he had been working on a complicated mobile technology that involved calculating transmission paths and developing a mobile phone network through which people could communicate effortlessly from anywhere in the world.

A few years later in January 1985, while still working for BT, Ibrahim invented the world’s first mobile phone network. The network he helped build was the only network in the world that was designed from the beginning to support ‘hand portables’- phones which one could carry in one’s hands, but which were designed primarily to be used in cars. Ibrahim’s mobile phone network set the foundation for mobile communication, as we know it today.

Born in Sudan in 1946, Mo Ibrahim spent his childhood and much of his youthful days in his home country before travelling to Egypt where he bagged a science degree from the University of Alexandria. He returned to Sudan at the age of 22 and picked up a job as an executive engineer at Sudan’s fixed-line operator.

Eager to develop his career as an engineer, in 1974 he moved over to the UK to study for a degree in electrical engineering at Bradford University and later went on to pursue a PhD in mobile communications at Birmingham.

After his studies, BT (British Telecoms) hired him to join their team as a technical director. They wanted him to work with them in building Britain’s first truly global network. It was the quintessential job, by any standards. Ibrahim was earning a rather impressive salary, enjoying hefty bonuses and other related perks of his high-profile job. But he was not happy.

Ibrahim was exceptionally passionate about mobile communications. He tried to get the company’s management to invest more resources in this remarkable new technology, but the organization did not particularly envisage a future in mobile communications. They treated it as a pet project- an experiment of sorts. This upset Ibrahim who was clearly convinced that the future of communications was in mobile hand-held devices. Frustrated by BT’s lacklustre support for his vision, in 1989, he left the company and set out to launch his own venture, Mobile Systems International (MSI) in his home.

MSI provided consultancy, management application software and network planning to the wireless industry. Obviously, the restless Ibrahim was doing something right because within four weeks of its start-up, MSI had become profitable. It became so successful that by the second month, Ibrahim was already earning much more than his previous bosses at British Telecoms.

Ibrahim quickly identified a huge demand for his skills. An increasing number of Telecom companies around the world were acquiring GSM (Global Systems for Mobile) licenses, but very few of them had a basic idea on how to develop and design networks to support them. As several of these companies approached Ibrahim to help with designing networks, he realised he needed to hire more staff.

He approached four of his previous colleagues at BT and shared his vision with them. He offered them a generous compensation package, equity ownership, and even more importantly- an opportunity to partake in the making of history. They were convinced to join his company.

He eventually recruited all of them, and they moved into a small office in the Docklands of London. MSI’s growth was meteoric.

MSI’s service was in great demand by all the major telecom corporations around the world; so Ibrahim and his team soon found themselves designing networks all across the globe. The company thrived.

In its first year of business, MSI made a gross profit of over $300,000, and revenues increased steadily at an average of 80% per year. MSI became a global leader in network design and went on to employ hundreds of additional employees. Eleven years later, in 2000, Ibrahim sold off the company to Marconi for $914 million. Through the sale, he and at least 50 of his employees became instant millionaires.

With new capital derived from the sale of MSI, Ibrahim set out to pursue an ambition he had nursed for several years- to build his own Pan-African mobile phone company.

At the time, countries across Africa were liberalizing their telecoms regulations and governments were offering mobile phone operating licenses at affordable prices. This was an opportunity Ibrahim was not prepared to ignore. Most foreign mobile phone companies were afraid to venture into Africa because of its socio-economic peculiarities, and the governments lacked the technical know-how to build mobile phone systems. However, there was a growing demand for telecommunication facilities in Africa.

Ibrahim embarked on a series of debt and equity financing rounds to fund the purchase of mobile phone licenses across Africa. He raised funds from the International Finance Corporation, Citigroup, and a couple of private equity firms focused on emerging markets. In his first fundraising round, he raised about $16 million, and subsequently acquired licenses in Uganda, Zambia, Malawi, Sierra Leone and Congo Brazzaville.

The following year, Ibrahim raised $35 million and acquired additional licenses in Gabon, Chad, Democratic Republic of Congo and Guinea. Two years later, he upped the ante, raising $216 million, which he used to snap up licenses in Niger, Burkina Faso, Sudan and Tanzania. Soon, Ibrahim’s mobile phone company, Celtel had become a dominant player in African telecoms. Demand was huge, and the company grew rapidly as a result.

By the time Ibrahim sold off Celtel in 2005 to Mobile Telecommunications Company (MTC), a Kuwait-based operator for $3.4 billion, the company boasted mobile phone operations in about 15 countries, with more than 8000 staff and over 20 million subscribers. The sell-out instantly made him one of the world’s wealthiest men, with a fortune estimated in the region of $3 billion.

Meanwhile, Ibrahim’s numerous travels across Africa had exposed him to the extreme poverty in the continent. He wanted to do something about it.

He was tempted to follow the traditional approach to alleviating African poverty: sending blankets to Darfur, rice to Niger. But on a flight over Kenya, the reality of the need for a different approach struck him. “I looked out of my window. The country was so lush, so green,” he once said. “I wondered how the people there could ever be hungry. Looking at the spaces, huge, endless spaces, animals, water, everything was there. I came to the conclusion that unless you are ruled properly, you cannot move forward. Everything else is second. Everything.”

In an effort to proffer solution towards solving Africa’s leadership crisis, he founded Mo Ibrahim Foundation, which advocates for better and ethical governance in Africa, and the Mo Ibrahim Index, to evaluate nations’ performance. In 2007 he initiated the Mo Ibrahim Prize for Achievement in African Leadership, which awards a $5 million initial payment, and a $200,000 annual payment for life to African heads of state who deliver the dividends of good governance and democratically transfer power to their successors. It has been described as the most valuable award in the world, and has prompted international media to refer to Ibrahim as ‘The African Nobel’.

There have been 3 recipients of the award so far. The first recipient was Mozambique’s former president, Joaquim Chissano. In 2008, the award went to Festus Mogae, former president of Botswana, while Cape Verde’s former president, Pedro Pires was the recipient in 2011.

Apart from doling out financial rewards to exemplary African leaders, the foundation also publishes the Ibrahim Index of African Governance, which ranks the 53 African countries according to human and economic development, political rights, personal safety and rule of law. Since its inception in 2005, this index has given Africans the tools to accurately measure their leaders’ performance and to hold them accountable.

Ibrahim has become one of the Africa’s most respected authorities on business and good governance. Although critics have long argued that his $5 million is insufficient incentive to lure African leaders to spurn corruption, greed and self-interest; no one can deny the fact that he is at the vanguard of change in Africa, and one of the major players in the continent’s contemporary renaissance.