Naguib Sawiris of Orascom, which has operations in more than nine emerging markets including Pakistan and Iraq, is sanguine about the future…
Naguib is a friend and the most keen mind of a Mobile Telecom President ever. He has always been prophetic and is already running ahead of the pack. he had said a while back :
“One morning I woke up and we had 14 countries in Africa and it was getting 5 percent of our Ebitda and 10 percent of our revenue, and that’s why we got out of Africa,” said Sawiris, referring to a measure of earnings. “The president of Chad was calling me, and I wasn’t taking his calls and then I thought, What am I doing in Chad if I’m not taking the president’s calls?”
But when everything aligns and the operations are successful, he says; that it can bring good profit for the operators and eventually many jobs for the locals and an improvement in the development of the local economy… But beware and don´t count your eggs before they hatch….
Bringing cellphone services to the other 97 percent of Africans, and the rest of the 3.5 billion people in the world without a mobile phone, had become both a target and an obsession for the industry, which is struggling to grow in Western Europe, the United States, Japan and other parts of the world where nearly everybody already has a cellphone, or two.
Albeit it might be a Rad herring too for friends and foes alike…
Vodafone’s acquisition of the Indian operator Hutchison Essar for $11.1 billion two years ago had set the tone for the future and focused the industry’s attention on emerging markets and more development of networks. Today the scene has reversed itself dramatically. Vodafone is promoting operations for Divestment but there are no takers anywhere on site…
Today the Casandras rule and no imminent investment for the developing world is on sight. Conversely a lot of Divestment is taking place quietly…
In the past flamboyant Arun Sarin, the ex-chief executive of Vodafone, had fanned the flames by declaring that he was open to more acquisitions in emerging markets.
His successor being more pragmatic isn´t. Of course he didn´t mention the mountains of debt Vodafone has to deal with in a time of very limited access to senior debt finance and restructuring neccessary to just maintain the company´s Life as we descend deeper in the crisis.
Today the CEO of China mobile is even considering contraction… and is asking for further government help.
Today the Vodafone chiefs also quietly approach the Ex-checquer. Go figure.
Many executives had enthused in the past few years with stories of how cellphones would bring economic growth to developing countries while saving the industry from stagnation in saturated markets. India was adding more than six million new subscribers a month, and photos of African tribesmen speaking on mobile phones were almost commonplace…
But not anymore.
With RPUs falling everywhere and globally as well as systemically, the mobile telecom carriers universal woes are in the finance and the return on Investment. Yet the core of the business is threatened as well and they are fast abandoning expansion plans in favour of consolidation heeding the example of the bankers.
Sadly the first to go are the developing world plans and the alternatives, such as new small rural networks, alternative energies, wind and solar power to supply energy for networks in some countries and the new microfinance initiatives are abandoned rapidly just as much detritus in the beaches of Dunkirk abandoned by the retreating Brits.
In some cases the emerging markets are the testing grounds for the new technology of extractive economics from the local fraqnchise to the parent company to shore up the HQ balance sheet. As usual the colonial mindset prevails in the London boardrooms but at what cost?
We have no answers here except to say that the future will continue unfolding rapidly and it will be the new breed of wildcat network operators and techniligy driven mobile small and ultra local operators that might be driven of f the back shop of a local ISP that will fuel the next wave of the Mobile revolution, now that the big network boys are running back home. Albeit they are running back with all the cash they extracted from the local markets in sweetheart capital repatriation deals that certain ministers of Finance chose unwisely to freely give to the overseas telecom investors.
Good Luck to the new Mobile breed in this time of the small is beautiful…
And this is the most propitious time to wade in the waters and lainch the new services and the mobile transfer for the Bphone.
A people´s phone simply dedicated to the developing world without presence in the colonial seats of power. Billion People Phone is the Bphone and small is beautiful and functional everytime. We put our moneywhere our mouth and our philosophy is.
Yours,
