Mobile Telecommunications: Two Entrepreneurs Enter Africa

Abstract

Winner of the 2014 EFMD competition for best African Business case.In the 1990s, two entrepreneurs made daring, early entries into mobile telecommunications in Sub-Saharan Africa, both seeing great market opportunities there. One firm, Adesemi, would ultimately go bankrupt. The other firm, Celtel, would ultimately succeed and make its founder, Mo Ibrahim, a star of the global business community. Why the difference in outcome? Emerging markets often present weak rule of law, bringing many challenges to business success—from the demand for bribes to regulatory obstacles, hold-up problems, and even civil war. This case explores strategies that can limit these critical non-market risks in foreign direct investment and entrepreneurship. Students will step into the shoes of both companies by exploring their entry strategies, wrestling with the challenges they faced, and diagnosing the reasons why a shared insight about a new business opportunity turned out to be prescient—and led to extremely different endpoints. Identify key challenges to successful entrepreneurship in emerging markets Evaluate government officials or competitors that might trigger regulatory obstacles or hold-up problems Evaluate potential allies that can help avoid these problems Assess strategies to avoid paying bribes Understand the importance of incentive alignment in directing investment success, even in the face of difficult challenges Identify and appraise the strategic value of partnerships with development agencie