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Last Updated: Monday, 5 July, 2004, 08:14 GMT 09:14 UK
A mobile vision for Africa
By Jon Cronin
BBC News Online business reporter

Building a mobile phone network across Africa is no small undertaking.

Kenya's Shimba Hills
Africa's landscape is vast

Connecting vast distances in the equatorial rainforest of Gabon or the Democratic Republic of Congo is a world away from linking London to the Home Counties.

Electricity supplies can be unreliable and transport links in many places non-existent.

And then there are the ongoing regional problems of political unrest and war.

But the boss of one of the continent's leading mobile phone companies has a message for the wider business world - "don't be afraid of Africa".

As chairman of Celtel, Dr Mohamed Ibrahim is at the helm of a pan-African firm with operations in 14 countries.

He rejects what he describes as Africa's "bad image".

"Much of Africa is looked on with suspicion by the rest of the world. It receives very little interest and very little attention, and I really don't like that. In sub-Saharan Africa the highest rates of growth are possible," he says.

An African story

Celtel's performance appears as good as Dr Ibrahim's word. In just six years the company has expanded across much of sub-Saharan Africa, from Sierra Leone in the west to Uganda and Tanzania in the east.

A recent acquisition in Kenya saw Celtel's subscriber numbers reach 4 million, while the company reported pre-tax profits of $151m (82m) in 2003.

Unfortunately, travelling in Africa is not convenient. If we put our headquarters in west Africa, we would have to come back to Europe to travel to east Africa
Dr Mohamed Ibrahim, Celtel chairman

Of course, this is small beer compared to the tens of millions of subscribers European giants such as Vodafone and Orange can boast of.

And there are bigger players in Celtel's backyard. In the more developed South African market, Vodacom has double the number of subscribers as Celtel.

But in sub-Saharan Africa, Celtel is operating in a part of the world where just 2.8% of the population use mobile phones, compared to a global average of 22%.

Dr Ibrahim describes his company's customers as mainly professionals and business people in urban areas, where much of Celtel's mobile coverage is concentrated.

But he adds: "Many of our users are also street traders and people running farms. If a farmer wants to sell his courgettes, he doesn't have to sell to the first person. He can find out what the prices are in the next town. People are getting better informed about their trade and business."

Travel problems

Set up in 1998, Celtel employs around 5,000 people across Africa. However, its headquarters are in the Netherlands.

Dr Ibrahim, who was born in northern Sudan but has worked in Britain for 30 years, says the decision to base the company outside Africa reflects the difficulties facing a pan-African operator - such as poor cross-border transport links.

Mobile phone user
Farmers can compare prices using their mobile phones

"Unfortunately, travelling in Africa is not convenient. If we put our headquarters in west Africa, we would have to come back to Europe to travel to east Africa."

And the company does not hide the fact that locating its headquarters outside Africa means international investors are more likely to take it seriously.

"Our presence in Europe makes us subject to the company laws of Europe," he says.

Areas in some of the countries where Celtel operates remain among the most dangerous places in the world.

"We have been through the conflict in Sierra Leone and the DRC and that was a difficult time for us," says Dr Ibrahim.

"We try not to take risks. Fortunately, our service is seen as universal and various parties to any conflict benefit from what we do. They see it just like water or like air, so we have never been harmed or targeted."

Soaring growth

Despite the disruption caused by war and poverty, international observers share some optimism for the development of mobile communications across Africa.

A report by the International Telecommunications Union (ITU), in May, showed that Africa was the world's fastest-growing mobile phone market, with use of handsets increasing at an annual rate of 65%.

Dr Mohamed Ibrahim, Celtel's chairman
Dr Ibrahim runs an "African company with European values"

The ITU also forecasts that Africa's mobile penetration rate - the number of people using mobile phones - may reach 20% by 2010, up from the current level of 6%.

The speed of mobile take-up owes as much to the poor quality of traditional, but unreliable and more expensive, fixed-line services in Africa, says Stephanie Pittet, an Africa mobile phones specialist with research group Gartner.

Her view is backed by recent ITU figures showing that there are now more people using mobile phones across the continent than fixed lines.

"You've got villages in Nigeria and Tanzania where you have one or two mobile phones for the whole village and they are used like a phone booth," she says.

Celtel's predominately prepay mobile service is the most popular option for customers in Africa, who, the company says, spend on average around $25 per month.

However, such a level of spend means that owning a mobile phone remains a distant prospect for millions of people in Africa.

'Clean ship'

"Many of the African operators are healthy companies," Ms Pittet says. "But the mobile market is still very underdeveloped and a lot of countries have an awful lot of people under the poverty line."

A Celtel shop in the Democratic Republic of Congo
Mobile phone shops are increasingly common across Africa

She adds: "Some companies have to be ready to do business within the limits of legality. It's the same for any other business."

As far as Celtel is concerned, Dr Ibrahim rejects this.

"We run a clean ship," he says.

"People say you can't do business in Africa without brown envelopes. I don't believe that. It is absolutely not true that in order to do business in Africa you have be corrupt."

Celtel has plans to continue its expansion across Africa, although Dr Ibrahim says there are some countries "with no respect for law or ownership" where his company would not operate.

But he remains upbeat about the future of the industry and the positive influence it could have on Africa's affairs.

"There is a massive need for mobile telephony in Africa," Dr Ibrahim says. "Where you have good telecommunications you usually have democracy. If you have a phone in your hand, then you have a voice."

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