By Charless Idem and Thebe Rammutle
Tales of entrepreneurial success are usually based on events or
circumstances that define and distinguish each story. At times, these
relate to the individual’s planned or fortuitous foray into a business
venture; the painstaking process of building same, a bruising setback or
a stroke of fate that leads to the game-changing break. The interplay
of these elements is what makes each entrepreneur’s story unique, and in
the case of Hakeem Belo-Osagie, the Nigerian entrepreneur and chairman
of the mobile telecommunications company Etisalat, the chemistry between
these elements is as vivacious as ever.
After more than a decade of running UBA and overseeing a
transformation of its fortunes, Hakeem, or Keem as he is widely referred
to, shifted his focus to the telecoms industry. Two prior unsuccessful
attempts to obtain a license were followed by a successful third bid
with the Mubadala Company of Abu Dhabi. The new player, Etisalat
Nigeria, rolled out its services six years after the first mobile
operator had launched in the Nigerian market. Etisalat became the fourth
operator alongside MTN, Glo and Airtel.
“I had made two attempts to get into the telecoms industry before.
The first time was when we had the first bid for GSM and there I was a
partner to Orascom. Four licenses were given and we were fifth, so we
just missed it. With the second attempt, this time working with Orascom
again to buy NITEL, we won, but we were told that our price was too low.
I thank God that we were rejected because I think that it would have
been very difficult managing NITEL. And then the third time, this time I
was not working with Orascom, I was working with a company called
Mubadala, which is one of the sovereign wealth funds of Abu Dhabi, and
this time we were successful in getting a license and that is the
foundation of the company called Etisalat.”
Experts and skeptics predicted a rough ride for the company due to
its late entrance into the industry. But since its commencement of
commercial operations in October 2008, Etisalat has surprised with its
solid growth and achievements. The newcomer had two million subscribers
in its first year and gained the reputation of being the most innovative
telecoms company in Nigeria. By 2011, it had 12 million subscribers,
despite the intense competition in Nigeria’s telecoms sector.
As mobile penetration continues to increase in Africa’s largest
telecoms market–with recent figures showing that the aggregate mobile
subscriber base has surpassed 100 million–telecom infrastructure
continues to mushroom across the country. Etisalat has invested more
than $2 billion in building and expanding its network. Of the estimated
20,000 cell sites scattered across the country, Etisalat’s
infrastructure accounted for around 15% in 2011. Belo-Osagie points out
that the expansion of the company’s network will continue.
“We had some gaps in our network in the South-South and South Eastern
part of Nigeria and we are now in the process of filling those gaps,
right now we have something in the range of just over 4,000 base
stations. We are very happy with our rollout because we think with this
number of base stations we can cover the whole country. However, our
objective over the next few years is to double that number and get to
the range of about 8,000 base stations.”
By October, Etisalat had surpassed its target for the year of 14 million subscribers.
“What we are particularly happy about is our 3G data offering, which
we think is universally accepted as the best and the fastest in the
market. As a company, we are going to continue to pioneer innovative
solutions as we seek to distinguish ourselves from our competitors.”
True to his words, Etisalat is stealing a march on its competitors in
the mobile banking race with its recent introduction of an innovative
SIM application called ‘Easy Wallet’. The application, which comes
pre-loaded on every Etisalat SIM card, encourages the adoption of mobile
phone as the preferred means of conducting basic financial
transactions. Belo-Osagie promises that the coming months will see more
such mobile money products.
“Well, I think we are very proud of the fact that our partner
Etisalat indeed won a prize for having one of the best mobile
applications in the world… at the recent telecommunications conference.
In addition to that, we’ve built on the strengths of Mubadala, which is a
sovereign wealth fund very much in the area of finance. You will notice
that many of the Nigerian directors have, at one time or another, been
involved in banking. We felt that it should only be natural that we be a
leader in the area in which telecoms and banking cross each other.”
Being the resolute operator that he is, Belo-Osagie wants Etisalat to rise to the second position in the industry.
“I do think though that with the correct strategy we can become the
number two (telecom) company in Nigeria. We focus very much on the youth
market. We focus very much on the data market and we focus very much on
the quality of services. I think we are also helped by the fact that we
have two very financially strong shareholders, Mubadala and Etisalat,
and we have funded our rollout, so the amount of debt that we have on
our book is relatively small. I believe that with the strategy that we
have, especially on that has avoided a lot of changes of management
which Airtel has gone through, and the depth of management we have in
comparison with Glo, I think that we will eventually get to the second
position in the market place.”
He describes the challenge of catching up with the market leaders as
“a management and intellectual challenge,” which he enjoys. With an air
of confidence that is almost palpable, he offers a concise analysis of
the industry.
“Realistically, I don’t think that any company can beat MTN in
Nigeria because the gap is very large between MTN and everybody else.
And while I think that MTN can improve its quality of service, I think
that it has a strong management; there is a real commitment to Nigeria
from MTN, and they’ve also done a lot in terms of the development of
local staff.”
Belo-Osagie’s childhood fantasies had nothing to do with running
businesses. His early ambition was to become a mathematician. Later,
while studying at a sixth form college in Wales, he developed an
interest in public service and went on to study politics, philosophy and
economics at Oxford University. He obtained a law degree at Cambridge
University before undertaking the Harvard MBA program. While at Oxford,
he obtained work experience as an intern at the OPEC headquarters in
Vienna.
His graduation from business school would coincide with the enactment
of a policy by the Nigerian government that permitted federal ministers
and the president’s advisers to employ aides. Through much more than a
stroke of luck, Belo-Osagie was appointed as an aide to the president’s
adviser on petroleum. He would go on to hold the position for six years,
despite a coup d’etat that led to the arrest and incarceration of his
initial boss. Following another coup, which occurred when he was getting
married, he made the decision to abandon the precarious public sector
to pursue opportunities in the private sector.
He set up a consulting firm which advised international companies
that sought to play in Nigeria’s oil industry. The venture was a
resounding success and after a few years and millions of dollars in the
bank, his entrepreneurial instinct sparked the hunger for another
venture. This led him to cast his attention to the financial sector and,
as fate would have it, the Nigerian government decided to privatize
banks established by the British, which were still under government
control.
Sensing the opportunity, Belo-Osagie cashed in and acquired UBA in a
landmark transaction. The consequent modernization of the bank, which he
spearheaded, led the bank to remarkable achievements. The UBA
acquisition would become the transaction that cemented his reputation as
an astute and dogged entrepreneur.
Before the triumph with UBA, Belo-Osagie tasted his share of failure.
He set up a financial services company called KMC in the early 1980s.
“We did very badly, but that failure was very useful to me because it
taught me a lot about what not to do. One of the things that I believe
is that setbacks are a very vital part of life because setbacks
strengthen you. You learn lessons from them; you learn to be tough; you
learn to be bold. Therefore learning the lessons from the failure of
KMC, I, with a group of others, set up First Securities Discount House,
which was a great success.”
Despite his media shyness, Belo-Osagie is well-known in business
circles locally and internationally. Indeed, he maintains a good
friendship with Daniel Yergin, the Pulitzer Prize winning author and
energy analyst under whom he authored a special paper on the state of
international oil markets, while at Harvard Business School. His calm
and unassuming demeanour belies a strong intellect and an uncanny
ability to spot lucrative opportunities. This is best reflected by his
status as one of Africa’s wealthiest men with an estimated fortune of
$400 million, which saw him at number 40 of the ‘Africa’s 40 Richest’
list in December.
When asked about recent calls urging telecoms companies to list on
the Nigerian Stock Exchange, he pauses to gather his thoughts, before
explaining meticulously and systematically the role that the telecoms
industry will have to play in fulfilling Nigeria’s aspirations.
“One way or another, all of us telecoms are going to have to accept
that we are living in a certain country, that the country has certain
communal, social and national interests and we are going to have to
adjust to those interests. I don’t think that the interest of the
company and the interest of Nigeria necessarily have to conflict. But I
think that there has got to be flexibility on both sides. And I don’t
think that the telecoms companies will be successful if they have an
attitude that is inflexible. So for me, sooner or later the Nigerian
companies will have to list, and I honestly don’t have a problem with
that at all.”
Government and telecoms companies should be discussing how the
listing process should unfold, with the question being on the various
policy options for listing, according to Belo-Osagie.
“Should all the companies be listed? Should it only be companies that
have been in existence for a certain number of years, or companies that
have reached a certain level of profitability?” he asks rhetorically.
He feels that it will be counter-productive, were government to
compel the operators to list. He advises that consultation rather than
fiat, should be adopted by government, so that the healthy atmosphere,
which he believes the Nigerian government, and to an extent, a lot of
African governments have done good to create, is sustained.
As the conversation switches to the subject of the future of Nigeria
and Africa, Belo-Osagie points out that he is cautiously optimistic
about Africa’s future. He believes that a lot of the growth in Nigeria
and Africa stems from the dismantling of many of the barriers imposed by
the over extensive state investment and participation in the economy,
in African countries. In his opinion, reforms, especially those in the
Nigeria, need to be stimulated. He observes further that governments
have an important policy role that needs to be refined.
“No matter how effective a private sector is, it cannot generate
electricity outside a set of policy measures that determine how
everything works together.”
Belo-Osagie believes that a crucial factor to the performance of
African economies in the next few years is the extent to which the
African public sector is reinvigorated across the continent. He notes
that, Africa’s success hinges on the paradox that sees governments
relinquishing control in terms of administering the economy, while
developing and exercising its capacity to articulate and implement
policies. He expresses his concerns that the pace of the policy
strengthening across Africa is not taking place fast enough. Comparing
developments in Africa with Asia, he says: “Whether it is Japan,
Singapore or South Korea, you will see the hand of the government that
is pushing, that is encouraging that is putting together the
infrastructure, that is ensuring that a competitive system is
established, you will see them in all of those areas. You will see them
ensuring that things like airports, immigration, state security, all
have the tools to do well in their area. The success of each of those
areas is as important to the running of an economy, as is simply giving
licenses to private companies.”
Outside his business ventures, the entrepreneur is a generous
philanthropist. As one who had the privilege to attend prestigious
universities, he is very active in supporting education. He is one of
the largest donors to the African Leadership Academy, an advanced level
college in South Africa, to which he has given more than $1 million. He
announces with pride that the school has named part of the library after
him and his wife for their contributions. Keem is also in his third
term as president of the King’s College Old Boys Association, the
college where he attended secondary school in Lagos in the 1960s. He
also sponsors an annual scholarship, The Hakeem Belo-Osagie Scholarship,
at Oxford University.
An ardent lover of jazz music and fan of Manchester United, Belo-Osagie takes a broad yet simplistic view of success.
“There is a quotation, which was adapted from something that John F.
Kennedy said, defining happiness, which I think is a definition of
success as well. He said it’s ‘The full use of ones talents, along lines
of excellence, in the life affording one opportunity, and in the
direction towards service.’ I think that one thing that makes you happy
or successful is to know that you are operating at the peak of your
abilities. The abilities can be in the carpenter who takes great pride
in his craftsmanship, making the great table. It can be the great
singer, the great mathematician. ‘In a life affording you opportunity’,
by that I mean that to be successful there must be the opportunities for
you to exploit, and that part of the kind of society we must create is a
society in which more and more people have the opportunities to develop
those talents. And in the African societies that g enough or that. And
then we say, ‘In the direction towards service’, which simply says that
the ends, the objectives cannot be solely focused on me, me, m. So I
like that definition of success or happiness because it says a lot which
I think is important.”
For a person who has traveled the world and been actively involved in
business for more than three decades, he clearly knows a thing or two
about what success means.
TheSun
