Tales of entrepreneurial success are usually based on events or circumstances that define and distinguish each story. At times, these relate to the individual’s planned or fortuitous foray into a business venture; the painstaking process of building same, a bruising setback or a stroke of fate that leads to the game-changing break. The interplay of these elements is what makes each entrepreneur’s story unique, and in the case of Hakeem Belo-Osagie, the Nigerian entrepreneur and chairman of the mobile telecommunications company Etisalat, the chemistry between these elements is as vivacious as ever.
After more than a decade of running UBA and overseeing a transformation of its fortunes, Hakeem, or Keem as he is widely referred to, shifted his focus to the telecoms industry. Two prior unsuccessful attempts to obtain a license were followed by a successful third bid with the Mubadala Company of Abu Dhabi. The new player, Etisalat Nigeria, rolled out its services six years after the first mobile operator had launched in the Nigerian market. Etisalat became the fourth operator alongside MTN, Glo and Airtel.
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“I had made two attempts to get into the telecoms industry before. The first time was when we had the first bid for GSM and there I was a partner to Orascom. Four licenses were given and we were fifth, so we just missed it. With the second attempt, this time working with Orascom again to buy NITEL, we won, but we were told that our price was too low. I thank God that we were rejected because I think that it would have been very difficult managing NITEL. And then the third time, this time I was not working with Orascom, I was working with a company called Mubadala, which is one of the sovereign wealth funds of Abu Dhabi, and this time we were successful in getting a license and that is the foundation of the company called Etisalat.”
Experts and skeptics predicted a rough ride for the company due to its late entrance into the industry. But since its commencement of commercial operations in October 2008, Etisalat has surprised with its solid growth and achievements. The newcomer had two million subscribers in its first year and gained the reputation of being the most innovative telecoms company in Nigeria. By 2011, it had 12 million subscribers, despite the intense competition in Nigeria’s telecoms sector.
As mobile penetration continues to increase in Africa’s largest telecoms market—with recent figures showing that the aggregate mobile subscriber base has surpassed 100 million—telecom infrastructure continues to mushroom across the country. Etisalat has invested more than $2 billion in building and expanding its network. Of the estimated 20,000 cell sites scattered across the country, Etisalat’s infrastructure accounted for around 15% in 2011. Belo-Osagie points out that the expansion of the company’s network will continue.
“We had some gaps in our network in the South-South and South Eastern part of Nigeria and we are now in the process of filling those gaps, right now we have something in the range of just over 4,000 base stations. We are very happy with our rollout because we think with this number of base stations we can cover the whole country. However, our objective over the next few years is to double that number and get to the range of about 8,000 base stations.”
By October, Etisalat had surpassed its target for the year of 14 million subscribers.
“What we are particularly happy about is our 3G data offering, which we think is universally accepted as the best and the fastest in the market. As a company, we are going to continue to pioneer innovative solutions as we seek to distinguish ourselves from our competitors.”
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True to his words, Etisalat is stealing a march on its competitors in the mobile banking race with its recent introduction of an innovative SIM application called ‘Easy Wallet’. The application, which comes pre-loaded on every Etisalat SIM card, encourages the adoption of mobile phone as the preferred means of conducting basic financial transactions. Belo-Osagie promises that the coming months will see more such mobile money products.
“Well, I think we are very proud of the fact that our partner Etisalat indeed won a prize for having one of the best mobile applications in the world&#8230; at the recent telecommunications conference. In addition to that, we’ve built on the strengths of Mubadala, which is a sovereign wealth fund very much in the area of finance. You will notice that many of the Nigerian directors have, at one time or another, been involved in banking. We felt that it should only be natural that we be a leader in the area in which telecoms and banking cross each other.”
Being the resolute operator that he is, Belo-Osagie wants Etisalat to rise to the second position in the industry.
“I do think though that with the correct strategy we can become the number two [telecom] company in Nigeria. We focus very much on the youth market. We focus very much on the data market and we focus very much on the quality of services. I think we are also helped by the fact that we have two very financially strong shareholders, Mubadala and Etisalat, and we have funded our rollout, so the amount of debt that we have on our books is relatively small. I believe that with the strategy that we have, especially one that has avoided a lot of changes of management which Airtel has gone through, and the depth of management we have in comparison with Glo, I think that we will eventually get to the second position in the market place.”
He describes the challenge of catching up with the market leaders as “a management and intellectual challenge,” which he enjoys. With an air of confidence that is almost palpable, he offers a concise analysis of the industry.
“Realistically, I don’t think that any company can beat MTN in Nigeria because the gap is very large between MTN and everybody else. And while I think that MTN can improve its quality of service, I think that it has a strong management; there is a real commitment to Nigeria from MTN, and they’ve also done a lot in terms of the development of local staff.”
Belo-Osagie’s childhood fantasies had nothing to do with running businesses. His early ambition was to become a mathematician. Later, while studying at a sixth form college in Wales, he developed an interest in public service and went on to study politics, philosophy and economics at Oxford University. He obtained a law degree at Cambridge University before undertaking the Harvard MBA program. While at Oxford, he obtained work experience as an intern at the OPEC headquarters in Vienna.
His graduation from business school would coincide with the enactment of a policy by the Nigerian government that permitted federal ministers and the president’s advisers to employ aides. Through much more than a stroke of luck, Belo-Osagie was appointed as an aide to the president’s adviser on petroleum. He would go on to hold the position for six years, despite a coup d’état that led to the arrest and incarceration of his initial boss. Following another coup, which occurred when he was getting married, he made the decision to abandon the precarious public sector to pursue opportunities in the private sector.
He set up a consulting firm which advised international companies that sought to play in Nigeria’s oil industry. The venture was a resounding success and after a few years and millions of dollars in the bank, his entrepreneurial instinct sparked the hunger for another venture. This led him to cast his attention to the financial sector and, as fate would have it, the Nigerian government decided to privatize banks established by the British, which were still under government control.
Sensing the opportunity, Belo-Osagie cashed in and acquired UBA in a landmark transaction. The consequent modernization of the bank, which he spearheaded, led the bank to remarkable achievements. The UBA acquisition would become the transaction that cemented his reputation as an astute and dogged entrepreneur.
Before the triumph with UBA, Belo-Osagie tasted his share of failure. He set up a financial services company called KMC in the early 1980s.
“We did very badly, but that failure was very useful to me because it taught me a lot about what not to do. One of the things that I believe is that setbacks are a very vital part of life because setbacks strengthen you. You learn lessons from them; you learn to be tough; you learn to be bold. Therefore learning the lessons from the failure of KMC, I, with a group of others, set up First Securities Discount House, which was a great success.”
Despite his media shyness, Belo-Osagie is well-known in business circles locally and internationally. Indeed, he maintains a good friendship with Daniel Yergin, the Pulitzer Prize winning author and energy analyst under whom he authored a special paper on the state of international oil markets, while at Harvard Business School. His calm and unassuming demeanour belies a strong intellect and an uncanny ability to spot lucrative opportunities. This is best reflected by his status as one of Africa’s wealthiest men with an estimated fortune of $400 million, which saw him at number 40 of the ‘Africa’s 40 Richest’ list in December.
When asked about recent calls urging telecoms companies to list on the Nigerian Stock Exchange, he pauses to gather his thoughts, before explaining meticulously and systematically the role that the telecoms industry will have to play in fulfilling Nigeria’s aspirations.
“One way or another, all of us telecoms are going to have to accept that we are living in a certain country, that the country has certain communal, social and national interests and we are going to have to adjust to those interests. I don’t think that the interest of the company and the interest of Nigeria necessarily have to conflict. But I think that there has got to be flexibility on both sides. And I don’t think that the telecoms companies will be successful if they have an attitude that is inflexible. So for me, sooner or later the Nigerian companies will have to list, and I honestly don’t have a problem with that at all.”
Government and telecoms companies should be discussing how the listing process should unfold, with the question being on the various policy options for listing, according to Belo-Osagie.
“Should all the companies be listed? Should it only be companies that have been in existence for a certain number of years, or companies that have reached a certain level of profitability?” he asks rhetorically.
He feels that it will be counter-productive, were government to compel the operators to list. He advises that consultation rather than fiat, should be adopted by government, so that the healthy atmosphere, which he believes the Nigerian government, and to an extent, a lot of African governments have done good to create, is sustained.
As the conversation switches to the subject of the future of Nigeria and Africa, Belo-Osagie points out that he is cautiously optimistic about Africa’s future. He believes that a lot of the growth in Nigeria and Africa stems from the dismantling of many of the barriers imposed by the over extensive state investment and participation in the economy, in African countries. In his opinion, reforms, especially those in the Nigeria, need to be stimulated. He observes further that governments have an important policy role that needs to be refined.
“No matter how effective a private sector is, it cannot generate electricity outside a set of policy measures that determine how everything works together.”
Belo-Osagie believes that a crucial factor to the performance of African economies in the next few years is the extent to which the African public sector is reinvigorated across the continent. He notes that, Africa’s success hinges on the paradox that sees governments relinquishing control in terms of administering the economy, while developing and exercising its capacity to articulate and implement policies. He expresses his concerns that the pace of the policy strengthening across Africa is not taking place fast enough. Comparing developments in Africa with Asia, he says: “Whether it is Japan, Singapore or South Korea, you will see the hand of the government that is pushing, that is encouraging, that is putting together the infrastructure, that is ensuring that a competitive system is established, you will see them in all of those areas. You will see them ensuring that things like airports, immigration, state security, all have the tools to do well in their area. The success of each of those areas is as important to the running of an economy, as is simply giving licenses to private companies”.
Outside his business ventures, the entrepreneur is a generous philanthropist. As one who had the privilege to attend prestigious universities, he is very active in supporting education. He is one of the largest donors to the African Leadership Academy, an advanced level college in South Africa, to which he has given more than $1 million. He announces with pride that the school has named part of the library after him and his wife for their contributions. Keem is also in his third term as president of the King’s College Old Boys Association, the college where he attended secondary school in Lagos in the 1960s. He also sponsors an annual scholarship, The Hakeem Belo-Osagie Scholarship, at Oxford University.
An ardent lover of jazz music and fan of Manchester United, Belo-Osagie takes a broad yet simplistic view of success.
“There is a quotation, which was adapted from something that John F. Kennedy said, defining happiness, which I think is a definition of success as well. He said it’s ‘The full use of ones talents, along lines of excellence, in the life affording one opportunity, and in the direction towards service’. I think that one thing that makes you happy or successful is to know that you are operating at the peak of your abilities. The abilities can be in the carpenter who takes great pride in his craftsmanship, making the great table. It can be the great singer, the great mathematician. ‘In a life affording you opportunity’, by that I mean that to be successful there must be the opportunities for you to exploit, and that part of the kind of society we must create is a society in which more and more people have the opportunities to develop those talents. And in the African societies that we have today, we are not doing enough of that. And then we say, ‘In the direction towards service’, which simply says that the ends, the objectives cannot be solely focused on me, me, me. So I like that definition of success or happiness because it says a lot which I think is important.”
For a person who has traveled the world and been actively involved in business for more than three decades, he clearly knows a thing or two about what success means.

Africa’s Unassuming Giant

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Forget oil and gold, there is new treasure in Africa—mobile phone subscribers. By the end of 2011, Africa will have surpassed the half a billion mark in mobile phone subscribers and the number is rising. In 2008, there were 246 million and three years later, this number has nearly doubled.
Manoj Kohli is at the heart of this growing business as the CEO (international) and joint managing director of Bharti Airtel. It launched in November 2010, after acquiring Kuwait-based mobile telecommunications company Zain for $8.3billion. The company inherited operations in 15 countries, cementing its position as the world’s largest single country mobile operator.
As of March 31, 2011 the operator had 220 million customers around the world and $5.9 billion in revenue. At the time of this interview, Airtel had hit 50 million paying customers in Africa; its target is 100 million customers by 2013.
“The Bharti Airtel business is doing well and we are satisfied with our first year in Africa. We are making good progress on all fronts, in terms of financial performance, market growth, market share growth, cultural aspects, government relationships and brand equity. We are happy that the first year has gone very well,” says Kohli on the seventh floor of Parkside Towers, the Bharti Africa headquarters in Nairobi, Kenya.
Bharti, the number one player in India, landed in Africa knowing that it was going to have to fight it out with established players like Britain’s Vodafone, South Africa’s MTN, France Telecom (Orange) and Luxembourg’s Millicom.
“India has a population of 1.2 billion and Africa has about one billion. India is very diverse; Africa is more diverse not only because it is large geographically, but it also has different communities, different countries and therefore different governments and regulations—whereas India is one nation, with one language, one government, one currency, one time zone, and one cricket. Therefore, in that aspect India is less diverse than Africa. Both have scale in terms of population and opportunity, but because Africa is more diverse, it makes it more complex. India has 13 to 14 competitors, which is not viable for any market. Africa has anywhere between three to five major competitors but the quality of competition is good,” says Kohli.
The Airtel brand made its presence felt by slashing call rates, sparking a price war in major markets. In Kenya, for example, where Airtel is number two—with 3.6 million subscribers by June 2011—there was a major decline in average tariff for on-net calls from KSh3.92 ($0.04) per minute to KSh2.67 ($0.03) per minute, according to the industry quarterly statistics in May from the country’s industry regulator, the Communications Commission of Kenya. Bob Collymore, Safaricom’s CEO, was quoted as saying that the price cut was “morally reprehensible”. Safaricom is Vodafone’s brand in Kenya. As the new kid on the block, Airtel was not letting up and Safaricom followed suit.
As Kohli looks back at Bharti’s performance in the last year, he says the company has established its brand. This, Airtel has successfully done by associating itself with the youth and the two big passions in Africa—music and football. In 2010, the operator brought together American R&amp;B musician R Kelly and eight African music superstars—2Face, Amani, 4×4, Movaizhalene, JK, Alikiba, Fally Ipupa, and Navio.
In football, Airtel has partnered with Manchester United in launching the Airtel Rising Stars program for under-17 boys and girls in 15 African countries.
The second major milestone, says Kohli, has been replicating Bharti’s Indian business model in Africa.
“It is still a work in progress, but all the initiatives of bringing in our global strategic partners like IBM, Ericsson, Nokia and Huawei have kicked off, which is a huge transformation for Africa. For example, IT education, training and employment will go up because IBM has come along with us to various countries in Africa.”
Bharti has entered into a 10-year agreement with IBM where the latter will install and manage the operator’s information technology infrastructure and applications in line with its objective of ensuring affordable and innovative mobile services in Africa.
In the coming years, Bharti has several strategies. One is taking networks deep into Africa’s small towns and villages not currently covered by mobile networks. The second is a wide distribution.
As Africa opens up, thanks to fiber optic cables, Bharti is keen on enhancing the internet culture in Africa through 3G data. Already, the operator has 3G licences in 12 African countries. In November 2011, Airtel was awarded licences to operate 2G and 3G GSM services in Rwanda.
Although Bharti is betting on 2G and 3G services to increase penetration, the telecom brand is also eyeing a mobile money service, already  a major cash-cow for Safaricom—to date, $1.8 billion has been transferred through its money transfer service M-Pesa, which was launched in 2007.
Kohli admits mobile money has been a small aspect in the business because in India, the business has had to comply with strict restrictions by the Central Bank. “Our M-commerce product will be a great differentiator for us in the long-term,” he says.
According to Jupiter Research, the number of active users of mobile money services will exceed 200 million by 2013. Nearly 40% of active users by 2015 are expected to be in Africa and the Middle East.
Looking into the crystal ball, 2012 will be about supremacy and transformation of wireless broadband. “There are many countries that are already mature on the voice side, but on the broadband, they would like to have more capacity and better experience. In Africa, where the average subscriber age is 18 years old, there is a propensity for youth to need voice (2G) and internet (3G),” says Kohli.
As far as mobile use in Africa goes, the only way is up; 2012 is likely to see massive investment aimed at increasing internet penetration through wireless internet.
The other growth will be driven by penetration into Africa’s smaller towns, not covered by wireless. This expansion will see the further growth of M-commerce as more of the unbanked population log on.
For new technology, Kohli says his company will test 4G in India first.
“Regulators in Africa will have to make licences for that and it could take anywhere between two to three years.”
Bharti Airtel will invest nearly $1.5 billion in its 2011/12 financial year. Also in 2012, there will be HSPA+ (an evolved high-speed packet access) to Africa. This will see internet speeds of up to 21 megabytes per second.
So does Kohli see more investors coming to Africa in 2012?
“I believe that in small countries, the viability of operators beyond the third is not likely. In small markets, I don’t think you will have more than three players. In larger markets, it could be four; I think that is the right level of viable competitive intensity for Africa, primarily because huge investments are required for Africa and it is very important that the operators are financially healthy for them to make all those investments in the coming five years.”
As a first-time investor in Africa, Bharti is grappling with poor infrastructure and power shortages. For a company that has to run its networks round-the-clock, it has forced the operator to turn to diesel generators which is obviously pushing up operating costs.
“That is why we are converting many of these sites to be run by solar and wind energy because the diesel cost is high and we want to avoid polluting the environment.”
The other hurdle for Bharti has been a high cost structure. The operator is benchmarking with its Indian operations, where costs are significantly lower. To deal with this, the operator is exploring economies of scale and sharing. “We are currently engaging regulators and competitors to support sharing of passive towers, networks and fiber optic. In some countries we have already had positive responses.”
In an earlier interview, Kohli told telecomasia.com that Bharti was talking with Etisalat, MTN, France Telecom, Millicom and Vodafone.
Bharti also has to handle the problem of weak telecom skills in Africa. “Ideally, we would like 100% of employees in each country to come from the country itself. However, this is not possible today because many skills are not available locally. Therefore, we have to bring skills from other countries in Africa, as well as from India. But we are determined that in the next two to three years, we will invest a lot in building these skills in each country and grow young African leaders to lead our operations in their home countries,” he says.
Kohli adds that, despite the challenges, Africa is still a great place to do business because of the available opportunities of growth and a growing population that is embracing technology. “In India, infrastructure only improved in the last 10 years. The cost structure is lower because India has a local manufacturing and service sector whereas in Africa, the manufacturing and service sector is not as big. India has gone through that improvement period in the last decade and I am confident that Africa will go through a similar improvement period in this decade.”
With unemployment plaguing the continent, Bharti wants to contribute towards job creation by involving young entrepreneurs in its business operations.
“We are developing young entrepreneurs who like technology and would like to sell technology as distributors of our various services and products. There is tremendous scope. Silicon Valley and India have many entrepreneurs doing outstanding work for value-added services, content creation, new applications. I am confident that in the next two to three years, young talent from Africa will also work towards development of new value-added services and applications.”
Kohli believes telecom can be the growth engine for the continent.
“Because the infrastructure in Africa is weak—roads, rail and air connectivity—it makes telecom an integrator that can bring speed, efficiency and productivity to Africa. With internet wireless broadband coming, I think the contribution of telecoms will be far greater in the next three to five years in building Africa into a strong economy, with growth going up from 4-5% and maybe 8-9% in the coming five years.
“India went through the same curve. We had a 4% rate of growth and because of IT and telecom, we have gone up to 8-9%.”

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