__An urban legend!
A few weeks ago I was in Abuja for two really important events that I wrote about recently:
# Celebrating 25 years of the African Export-Import Bank (Afreximbank).
# The signing ceremony between Liquid Telecom and Telecom Egypt to partner in linking Egypt to the “One Africa Broadband Initiative” (from Cape to Cairo!)
Whenever I go to Abuja, I always sense that something big is going to happen in Africa. The Nigerian capital is a place where legends are born. Maybe I feel this way because of something that happened there in 2001 that few people outside the telecoms industry know about. Let me tell you about it again, so that you can tell your children one day!
When President Obasanjo, a passionate Pan-Africanist, came out of prison to lead Nigeria into democracy, he quickly realized that he needed to do something about telecommunications in the country. Nitel, the state-owned telephone company, had only 400,000 telephone lines in a country with 150 million people. It was a scandal!
President Obasanjo made it clear he preferred Nigerian companies in partnership with experienced African operators to bid for the three available licenses. At that time there were four African-led telecoms groups:
# MTN South Africa, led by Phuthuma Nhleko
# Celtel, led by Mo Ibrahim from Sudan
# Orascom, led Naguib Sawiris from Egypt
# Econet Wireless, led by myself from Zimbabwe but exiled to South Africa.
Although there were no Nigerian players in the industry at the time, oil magnate Mike Adenuga put up his own company, Glo Mobile.
Each bidder had to have Nigerian shareholders to qualify. The African telecoms sector was booming and although there were big international players like Vodafone and Orange, they did not join the process.
It is the only time in African history that such a bidding process was ever put in place!
President Obasanjo invited us to Abuja to start bidding for three mobile licenses. This meant two of the bidders would have to drop out. The bidding process was to be managed by an international telecoms auction team from the UK, working for the Nigerian Communications Commission (NCC). It was to take place at the Abuja Hilton.
# Every bidder had to lodge a deposit of $20m to participate!
# Bids would open at $100m!
# Any bidder who bid less than $100m would lose their deposit!
This was the business equivalent of a heavy weight boxing match! Five bidding consortiums:
# MTN Nigeria
# Celtel Nigeria
# Orascom Nigeria
# Glo Nigeria
# Econet Wireless Nigeria
President Obasanjo wanted the #Process to be competitive and transparent. The media were everywhere at the Nicon Hilton Abuja as we arrived for the “big fight”!
Abuja’s largest hotel was filled with men and women in dark suites. Mostly lawyers and bankers! Every single Nigerian bank was there working for one of the bidders, so were the lawyers!
It was amazing!
The day began with a briefing of the rules by the Nigerian Communications Commission (NCC) and its advisors:
# Each team would be allocated a floor of the hotel.
# Each team had five players.
# No access to phones, and every team would be assigned monitors and auditors from the Federal government to ensure no collusions.
I had already chosen my team which included a lawyer, an international banker, and two representatives from my Nigerian partners.
We headed to the Nicon Hilton. I started my day with prayers led by Pastor Langton Gatsi who had travelled from Harare to give me support. He was part of a strong contingent from “little Econet” (as everyone called us) who helped with the computer modeling to determine the bid price. I had already convinced our investors that it could hit $300m.
It took three days of bidding to settle the bid at $285m per license (the most expensive license ever issued in Africa at the time):
# MTN Nigeria
# Glo Nigeria
# And “little Econet”!
We were given 14 days to make full payment or lose our deposits. A few days later we paid in full. The rest is history, as they say…
Today more than 150m people in Nigeria have a mobile phone. I personally made the first GSM call to the regulator on 6th August 2001 advising him we were ready to start offering service to the Nigerian people.
In the past two decades now, technology like mobile telephony has opened doors to commerce and opportunity for millions of people, formerly far from prosperity’s doorway. And so much more is possible. What is in your hand? Where is it taking you?