IBM sees opportunity in Africa's economic growth - Dec. 6, 2007

IBM's next big thing: Africa

While all eyes are on India and China, the technology giant sees business opportunity in the expanding economy of the world's poorest continent, says Marc Gunther.

By Marc Gunther, senior writer

IBM sees opportunity in Africa's economic growth - Dec. 6, 2007: "NEW YORK (Fortune) -- Stereotypical images of Africa, as a global backwater plagued by poverty, disease, conflict and corruption, hide some encouraging realities. Democracy has taken root across the continent.

The African economy is expanding briskly. So, too, are opportunities for businesses. That's why IBM (Charts, Fortune 500) announced this week that it's expanding its stake in sub-Saharan Africa.

The $91-billion-a-year technology giant will open a research and innovation center in Johannesburg for its biggest business customers. It will donate what it says is by far the most powerful supercomputer in Africa to a nonprofit computing center in Cape Town.

Working with the poverty-fighting organization CARE, IBM will roll out a technology platform to reduce the costs of microfinance."

Celtel is a big player in Africa

Celtel is an African success story. I get this information from their home page: "We began in our mobile phone operations in 1998, and since then we have built networks in 15 African countries, under licences that cover more than a third of the population of Africa.

Our original holding company, MSI Cellular Investments, changed its name to Celtel International in January 2004. Commercially, we have a strong record of investment and growth. Culturally, we operate to the highest standards of professional and corporate ethics.

Celtel has invested more than $750 million in Africa. Our goal is to build and operate world-class networks that will keep pace technologically with networks in Europe and North America."

SUDANESE MOHAMED IBRAHIM

Celtel, founded by Sudanese Mohamed Ibrahim has grown to become one of Africa’s biggest mobile phone players. With the launching of their “One Network” in September, they have created the world’s first borderless mobile phone network - that allows customers to move freely across geographic borders without roaming call surcharges and without having to pay to receive incoming calls.

Safaricom feeling the heat, has also just announced its plans to go regional. I have a feeling we’re about to see a lot of interesting things happening in the very near future. Can anyone say ka-ching-ching!

HOW BIG IS THE MOBILE MARKET?

Market estimate by dkfaktor. One look at the statistics is enough to tell you just how much money there is to be made in the African cellular market which is largely untapped:

• Global Mobile Users – 2 Billion
• African Mobile Users – 83 Million (4%)
• Expected 2006 Growth in Africa – 48 Million new subscribers (2006 Stats)

"AFRICA and the Middle East are the two big new markets being targeted by the world’s cellular operators. Both are largely untapped, so cellular operators are prepared to pay over the odds for a foothold. This was evident in MTN’s past decision to pay a staggering $5,5bn to buy pan-African and Middle East player Investcom, while Celtel bid $1bn bid for a majority stake in Nigeria’s V-Mobile – Business Day (SA). The race is definitely on." Writes dkfaktor in an informative blog.

Africa Connected

Dr Mohamed 'Mo' Ibrahim

13^th February 2007 - Barcelona: The GSM Association Chairman's Award was presented last night to a remarkably successful mobile entrepreneur, a pioneer of technical achievement and a driving force in the industry's efforts to connect the unconnected of Africa.

This highest annual award - in recognition of outstanding achievement in supporting the growth and vitality of the global mobile community, and the highlight of the Global Mobile Awards - was presented by GSMA Chairman Craig Ehrlich to Dr Mohamed 'Mo' Ibrahim, the founder and chairman of Celtel International, which operates networks in 15 African countries.

Technical innovator

Dr Ibrahim is a technical innovator who joined the industry 22 years ago at the launch of the world's first mobile network. More than 18 years ago he founded Mobile Systems International (MSI), a company that developed the software to help operators manage and plan their use of radio spectrum at a time when networks were planned using tracing paper and a map.

He subsequently founded a mobile operator that invested in the underserved African telecommunications market, which in 1998 consisted of a mere 2 million mobile users on the entire continent. That company eventually became Celtel and it paved the way for much of the growth of mobile communications throughout Africa.

Celtel International

With more than 60% growth per year, Celtel today has more than 17 million users, and is licensed to serve more than one half of the continent's population. In 2005, Celtel was sold to MTC - a middle east based mobile group serving 20 countries – for more than $3.4 billion, although Dr Ibrahim remains Chairman of the Celtel board.

In October 2006, the Mo Ibrahim Foundation was launched, with backing from world leaders including Nelson Mandela, Kofi Annan, Bill Clinton and Tony Blair. The Foundation is a radical new initiative to promote and recognise good governance and leadership in Africa, and will award the Mo Ibrahim Prize for Achievement in African Leadership - worth $5 million with a further $200,000 a year available for good causes suggested by the winner.

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