Interaction
Celtel: Creating a buzz in Africa
There were just 2 million mobile phone users across African nations back in 1998 when ‘Celtel’ was set up, most of whom in South Africa. Today, out of a total of 200 million mobile users on the continent, 25 million are Celtel customers.
What’s behind the success of company that is adding one million new customers every month? “Balancing the risks and returns and understanding how to do business in African nations,” is part of the explanation, says Terry Rhodes, the company’s co-founder and strategy adviser.
Good branding with a vibrant logo, together with being a “principles based company”, including investment in every employee’s future, are all part of the growth, explains Rhodes from the company’s office in Hoopddorf, the Netherlands. The Celtel network now stretches across 15 African countries from the Atlantic to Indian Oceans; Burkina Faso, Chad, Congo , Gabon, Kenya, Madagascar, Malawi, Nigeria, Niger, Democratic Republic of Congo, Sierra Leone, Sudan (where it operates as ‘Mobitel’), Tanzania, Uganda and Zambia.
“We had to persuade people that the company was a lower risk than perceived,” adds Martin de Koning, Celtel’s Communications Director.
Sudanese expatriate, Dr Mo Ibrahim, a former telecommunications consultant, started Celtel almost a decade ago joining fellow consultant, Terry Rhodes, in acquiring a single license to operate in Uganda.
Getting the finance together for the huge infrastructural investment needed was the first step, right down to purchasing of back up generators so networks could keep on running in the event of power cuts. A US$1 billion sum was raised from a mixture of private and public capital.
In 2005, Celtel was sold to Kuwait’s MTC, a leading Middle Eastern Telecommunications company for US$3.5 billion dollars. This sale resulted in windfalls of the equivalent to six-month salary for many employees. In 2006, the company moved into the huge Nigerian market with the US$1 billion acquisition of a controlling stake in ‘Vmobile’, rebranded as ‘Celtel Nigeria’.
Rural expansion
Celtel either tenders for licenses or acquires local companies. In 2007, MTC/Celtel’s investment in the African continent was expected to be around US$2 billion, with an onus on expansion in rural areas.
Of the company’s 7,500 employees, 99% are from African nations, explains Rhodes. There are a total of 400,000 points of sale for the pay as you go cards across all 15 countries.
From a position of importing technology into the continent, the company is now trailblazing the world’s first borderless mobile phone network in African nations, offering customers across six countries the possibility of calls without incurring so-called ‘roaming’ surcharges, explains Rhodes. You can buy a SIM card in Congo-DRC, Congo-Brazzaville, Tanzania, Uganda, Kenya and Gabon and be charged the same rate in any of the six. Branded as ‘One Network’, this product is ahead of anything offered by EU-based mobile phone companies which levy hefty charges for calls made and received in any EU country other than where the SIM card was purchased, says Rhodes.
Koning explains that Celtel offers continual training to its employees, including a 15-month training graduate programme, ‘Headstart’. Company options and shares are other perks. Celtel is also involved in a number of voluntary projects to distribute books to schools and school- building work.
It is keen to extend its network to other African nations, notably Ethiopia, Mozambique and Angola, on its way to becoming a leading pan-African phone company.
