Case Detail

Case Summary

Mobile Telecommunications: Two Entrepreneurs Enter Africa

Case Number: 5-413-758, Year Published: 2014, Revision Date: June 30, 2015

HBS Number: KEL805

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Authors: Benjamin F Jones; Daniel Campbell

Key Concepts

Board of Directors, Competitive Strategy, Cross-Cultural Relations, Entrepreneurial Finance, Entrepreneurship, Ethics, General Management, Global Strategy, Government Policy, Information Technology, International Business, Leadership, Politics, Reputations, Small and Medium-Sized Enterprises, Society and Business Relations

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.

Learning Objectives

After reading and analyzing the case, students will be able to:

  • Better define and comprehend key challenges to successful entrepreneurship in emerging markets
  • Evaluate the potential for government officials and established competitors to trigger regulatory obstacles, hold-up problems, and other disputes
  • Evaluate potential customers, including the government, as allies in avoiding these same problems
  • Assess strategies to avoid paying bribes
  • Understand the importance of incentive alignment in directing investment success, even in the face of difficult challenges, such as ongoing civil wars
  • Identify and appraise the strategic value of partnerships with the World Bank and other development agencies

Number of Pages: 18

Extended Case Information

Teaching Areas: Entrepreneurship

Teaching Note Available: Yes

Geographic: Sub-Saharan Africa

Industry: Telecommunications

Organization Name: Celtel and Adesemi

Organization Size: Medium

Year of Case: 2000