Born in the Sudan in 1946, Mohamed Ibrahim undertook higher studies in Egypt, which brought him an engineering degree at the University of Alexandria. He then returned to his home country to work for the state operator, Sudan Telecom. At the age of 26, he left for the United Kingdom with the objective of obtaining a higher degree, the famous PhD of English and American programmes.
Your thesis dealt with mobile communications. Why this choice?
At the time - this was in 1974 - this area was still poorly explored. It was a question of studying what happened when a transmitter and a receiver exchange a radio signal and one or both move. Buildings create interference. My studies dealt with drawing up equations for these interferences with a view to establishing the physical laws that govern them. I was a researcher at the University of Birmingham. A scientist, a person who works for glory, who is capable of spending hours doing experiments and calculations!
When did you enter the business world?
In 1983, British Telecom created a company called Cellnet for in-car telephony. It was supposed to start operations in 1985. I was hired as the technical director. It was the first cell phone network in the country. Nothing to do with the mobiles of today, where communications are digital. At the time, it was a question of analogue transmissions, as still generally tends to be the case today for television. The telephone handsets were heavy and cumbersome, needed a large aerial and consumed lots of energy. The transmitter for the mobile apparatus had a power of 20 watts. In today's telephones, they are only a few watts.
As technical director of a subsidiary of British Telecom, Mo Ibrahim found himself dealing with one of the first mobile telephones in 1984. He persuaded his bosses to launch it commercially. In parallel, European operators and manufacturers worked jointly on GSM.
Was there a particular moment or event where you became aware of the future of mobile telephony?
A year before the entry into operation of the Cellnet network, when I was at a trade fair in the United States, Motorola's engineers presented me with a prototype of the mobile phone. They lent it to me for a day, and I immediately understood the interest: the telephone was no longer linked to the house, the office or the car. It belonged to an individual, to me. Sure, the handset was rather heavy and cumbersome, a bit like those walkie-talkies that you see in certain American films on the Second World War, but it offered so much more!
Back in London, British Telecom allowed itself to be persuaded…..
You don't take such a decision lightly. Selling this product obliged us to undertake a complete review of the network that we were in the process of installing. It needed aerials not only for roads, as planned for car telephones, but also on roofs, in order to allow telephone calls to be made from the building opposite, for example. We did a certain number of tests and they were conclusive. We also needed to make sure that the handsets were available. We ordered 5,000 handsets. This was the first mass production of such a device…And this was how, in London, in 1985, the first mobile network in the world began operating.
Do you remember the beginnings of GSM?
British Telecom began working on it in 1984. GSM is a European Community programme. The European Commission succeeded in getting all the states to agree on the same mobile telephone that was to be digital and cellular. Each member country committed to using it and with this objective, to have teams that would work on finalizing it in collaboration with their European counterparts. This approach was genuinely new. It was the same one that was adopted for Airbus. In this way, the new products accessed a market of several hundred million customers in twelve countries, twenty-five today, instead of being limited to a single country and 50 million inhabitants, for example. When I left British Telecom, I had around forty engineers working on GSM.
After implementing the GSM standard, at the end of the 1980s, Europe took a second decision which turned out well for Mohamed Ibrahim: opening up the telecom sector to competition. Our entrepreneur had just turned 40. With a handful of friends, he set up his company which over time started to pay its employees shares.
You had a good position with British Telecom, but you left this group to become a consultant…Why?
I'd had enough of working in a big organization, which was too complex and too frustrating for my taste. I wanted to be my own boss and decide my own fate…New players were appearing on the market. They hadn't come from the telecoms business and could hardly count on the support of the well-entrenched operators with which they started to compete. I started to sell my services to advise them on installing their network, with a first contract in Sweden. I created my company, named Mobile Systems International (MSI). A year later, I'd hired ten engineers. In 1992, there were 25 of them, and in 2000, when I sold it to Marconi, it had 800 employees.
Were you the sole shareholder?
I was at the start. But I had the habit of giving shares to every employee, for example, when I hired them or later, as a bonus. This had the effect that, at the end of the day, by 2000, the staff held around 30% of the share capital. This doesn't mean that I was the sole owner of the remaining 70%. Over time, I had brought investors into the share capital of MSI. In particular, in 1996, we merged with a specialist software company and there was a share swap. The software which allowed simulating network installations and their operating conditions had become a more important activity that simple consulting on network architecture.
But what was the point of giving shares to employees since the company wasn't listed on a stock exchange, weren't they worthless?
That's exactly what the people I employed told me. And I replied that it was a form of supplementary remuneration, to thank them for their trust and investment of time and work. For newly hired employees, I'd give a rough share value, simply so they could compare it with the proposed salary. It was a value we had ourselves worked out by comparing ourselves to other companies. It was around 14 pence. When the company was bought by Marconi, they were able to sell their shares for £ 14 each, 100 times more!
Did you choose this form of supplementary remuneration because stock options were in fashion?
No. I never went to business school. I don't seek to distinguish myself through my management methods. I wanted the people who create wealth to be rich. They worked a lot, they didn't have fixed working hours or weekends off. As we were in a fast-growing industry, the company was very profitable and all the shareholders received dividends. For employees, it was a bit like an annual bonus. I repeated this form of operating within Celtel, and, when we were acquired by MTC, the employees who had shares made a great deal of money, while the others shared a specific allocation of $18 million. At the time, Celtel had 4,000 employees, of which 98% were African.
In 1998, the consulting company went over to being a mobile telephony operator. Seven years later, Celtel had ten million customers in fourteen countries, all located in sub-Saharan Africa, where few Western groups had dared to tread except in the oil and gas and financial industries.
Why did you create MSI Cellular Investment (MSI CI), which would later become Celtel?
We initially created MSI CI with the objective of bringing together our various holdings. In the process of our consulting activity, MSI actually took equity stakes in several operators. Either as a sign of our confidence in launching a network or because we tried to help in the billing we were paid in shares. In 1998, MSI had offices in 17 countries.
Of this total, how many offices did you have in Africa?
None, for the simple reason that nobody invested in sub-Saharan Africa apart from South Africa. When I asked why, I realized just how negative the image was of this region of the world. Since I'm African by origin myself, I was obviously well aware of the daily difficulties faced by people in Africa. But I felt that my contacts greatly overexaggerated the risks, that there was an enormous gap between their perceptions and the reality. Through discussing and arguing for this idea, I decided that MSI CI would become a mobile telephony operator in Africa.
Were you certain of success?
I was convinced that there was a market and that it would be a success but I had no idea to what extent. The need of individuals to communicate with each other is the same in Africa as anywhere else, but Africans felt frustrated due to the almost complete lack of available landlines. We were the first to take the bet that cellular telephony could fill this void. The first networks were introduced in Uganda and Zambia and we immediately sought partners to invest alongside us. During the first five years, we made more than ten financial presentations to potential investors.
Were there difficult moments?
In 2001, after the speculative bubble in technology stocks burst, I asked myself for a moment whether I would still be able to persuade other organizations to invest alongside us. You've got to understand: the sudden lack of interest of stock markets in our industry added to the negative perception of Africa and this in a full investment phase, as we were launching our activities in several new markets…but my fears didn't last long. To a certain degree, it was the opposite that happened. Indeed, the year 2001 in Africa within our industry also brought the first good news. Our client base and its annual growth became significant indicators.
When MTC bought 85% of Celtel for $3.4 billion, you became very rich, didn't you?
I'd remind you that I wasn't alone in the adventure. The sale of Celtel to MTC represents a victory for all our shareholders, starting with the investors who put their faith in us, some of whom had been with us from the start, in 1998. They took the bet on investing in Africa, in markets that still didn't exist and in countries which everyone told them had a hugely uncertain outlook. Their investment was remunerated in line with the success achieved and the risk that they agreed to take. Some of them multiplied their starting capital by 25, which perhaps allowed them to invest in other industrial sectors in Africa. With greater confidence.
What are you going to do now?
I've put together a $100 million fund, which I'm going to invest entirely in Africa, for example to take equity stakes in innovative African companies. I'd also like to create a foundation to improve governance. I'm working on this with several well-known people interested in the question, notably with Dr. Salim Salim, the former secretary general of the OAU, and with Mary Robinson. You know, she was President of the Irish Republic and United Nations High Commissioner for Human Rights. Good governance is crucial.
Why?
Without transparency, there's no investment and this is the only way of creating jobs and prosperity. Aid and charity are fine, and sometimes they're necessary. But they don't create wealth. At Celtel, we were always motivated by good governance. It was in this way that we were able to persuade investors and to create a board of directors composed of prominent figures drawn from various backgrounds. Experts on the business environment in Africa or telecom specialists. A board of directors which I do clearly chair, but on which, as I'll remind you, I only have one seat.
What is this point supposed to mean?
It serves to underline the fact that Celtel is not the success of a single individual, but is a success shared by numerous individuals or institutions, that at one or other point contributed to our progress. With them, with the employees, we built a genuine company, in the modern sense of the term: an entity which creates jobs and pays taxes and dividends with the greatest transparency. This is a genuine business, as the Americans say, but a business that was created in sub-Saharan Africa, a region that nobody had ever shown any interest in. And if we'd not succeeded, or if we'd played funny tricks, nobody would ever invest in Africa again.