Building something from nothing - mobile phones in DRC

Coverage of TED African Conference in Arusha, Tanzania

By Ethan Zuckerman
Alieu Conteh is a Gambian entrepreneur who has been deeply involved with the Democratic Republic of Congo, even during some of the nation’s darkest days. Under the Mobutu government, he was a coffee exporter, purchasing beans, roasting them in Kinshasa and flying it to London for export.

When the Congo descended into civil war (sometimes called the First Congo War, from 1996-7), Conteh saw this potentially rich nation in ruins. But when Laurent Kabila took power, Conteh saw the possibility to build a business around telecommunications.

He remembered spending five hours at a post office waiting to make a phonecall, watching people sleep at the post office so they could make phonecalls. When the first war ended, there were only about 15,000 fixed lines in the country, largely assigned to Mobutu’s ministers, bodyguards, and some wealthy businessmen. It’s impossible to overstate the need for communications, since there’s very little transport infrastructure in the nation to tie people together.

Despite having almost no experience in telecommunications, Conteh decided to bid for a wireless license. The government’s terms kept changing, eventually increasing to $10m for a GSM license. Conteh pushed back, explaining that the country was still at war and that no one would pay that price given the risk. He ultimately paid $2 million, and was granted a year to build a nationwide network.

But the main challenges were still ahead - no one was interested in funding the project, including equipment manufacturers. He ultimately chose to work with Nortel, using their Piconode system, but had to show 110% of available capital, as no companies would extend financing. Ultimately, he wrote a check for over a million dollars of his own money.

It became apparent immediately that there was a real market for mobile phones. Even before there was a prepaid billing system or international connections, people were queuing up to buy phones for $350 each. With some of the capital generated from those phone sales, he was able to purchase software and equipment from Massachusetts to support prepaid licenses. (It evidently took weeks to persuade anyone from the selling company to come to Congo to install the equipment given state department warnings.)

A major challenge to expansion throughout the nation was resistance from local rebel commanders, all of whom wanted their own licensing fees before allowing towers to be build. Jean-Pierre Bemba relented first, and eventually all four major rebel leaders allowed the towers without additional fees.

The punch line to Conteh’s story is that his company now has 3 million subscribers, half of the total subscribers in DRC, and was recently valued at $1.6 billion dollars. As Chris Anderson says, thanking Conteh for the talk, “There’s money to be made in Africa.”

Original by Ethan Zuckerman (Blog: My Heart’s in Accra) writes from TED conference in Arusha, Tanzania.