AFTER fighting the Zimbabwe government for four years in the early 1990s over a telephone licence, little did Strive Masiyiwa know that his company, Econet Wireless Group, would turn into a global player in the telecommunications industry
Masiyiwa, the chief executive of Econet, has been in the telecoms business for more than 20 years.
Two months ago Econet ended its eight-month partnership with Allied Technologies (Altech) in a deal that put a stop to litigation and an acrimonious public battle between the two companies.
Masiyiwa has six children – five daughters and a son.
The following are excerpts of The Star’s interview with Masiyiwa:
Econet has been quiet ever since the deal with Altech collapsed. What has been happening?
We are restructuring the company in preparation for the listing of Econet Wireless Group in London in May. We want to raise some more capital – between US$400 million (R2,7 billion) and US$500 million – mostly to add to our portfolio of assets as well as to expand the existing assets.
We plan to accommodate new shareholders. We have received interest from South African investors, but we can’t disclose the names. We will also announce two deals. One will be closed soon and will not add anything new until we complete the listing.
Why list on the London Stock Exchange and not the JSE?
We hoped that we would be able to list in Johannesburg, but we are still concerned about the exchange control rules. We hoped that by now the government would have relaxed them a little bit more.
But we are happy with the progress. Besides that, we don’t have an operation in South Africa and we have an operation in the UK. It’s a good time for telecoms companies to do a listing. There has been a major re-rating of Africa’s telecoms companies.
How is Econet Wireless Global doing since losing Altech as a partner?
We now own 100% of the company and everything is continuing as normal.
Our operations – Botswana, Kenya, Lesotho – are dominant players in all their markets. In Botswana, our Mascom business has a 71% market share competing with French group Orange.
In Nigeria, we are one of the top operators. In the UK we are a satellite operator, but still in its market segment it is a dominant player.
Our major task has been that we want to control 50% or more in each company in which we are involved, including Nigeria. Because (then) we can consolidate and direct the company. That is why we have stuck to our guns in a court battle over increasing our stake in Nigeria’s mobile operator, V-Mobile, from 5% to 51%. We want to run it. It’s an important business.
Where did you get US$87,5 million to buy out Altech?
From the market. The market loves Econet. At the moment, it is not difficult to raise money for telecoms. We never said we did the transaction because we were desperate for money. We did it because it was a good transaction at that time. It didn’t work out and business is like marriage: if it doesn’t work out, you move on.
We raised quite a bit of debt. That’s why it makes sense for us to do a listing so that we can deal with some of our debts. We have raised even more debts because of the Nigerian transaction and litigation, and we are going to the market to raise funds.
What have you learned from the failure of the partnership with Altech?
I’m just too busy to think about it. In the end it was an amicable resolution.
We wish them well and hope they wish us well. This was not the first joint venture. We have partners in other countries. We don’t always do things on our own. Altech was just one of our many partners.
The media did not understand the deal. They thought that Altech had bought part of Econet. We never allow anybody to buy into our group because we want to keep its African identity. The group level must maintain its African identity because we need to inspire black African entrepreneurs to show them that they can start companies on their own, and go and build them in other countries. It will always be a bit of novelty to people.
We have joint ventures with many companies: Eskom is our partner in Lesotho. Some partnerships work, some don’t. We will be in partnership with others, but not at a group level. Our partnership with Altech might not have worked but that doesn’t mean that we won’t partner with other companies.
You have been criticised for not knowing when to stop fighting because of the legal battles that you have had in the past, and the existing litigation in Kenya and Nigeria. But others admire you for the way you stand your ground. What is your take on that?
It’s good that people have different opinions. I never go out with the intention to have an adversarial relationship. People reach their own conclusions and in business you try your best to be as accommodating as you can be. I also carry a responsibility, because our forefathers did not get the opportunities that we have. We are setting out a path for the next generations and setting an example to clean up Africa’s image.
Those who say we don’t know when to stop should not start a fight with us because we always stop at the end. I’m not going to stop in the middle. I stop at the end of the fight. That is why I won’t stop in Nigeria until I have the 51% stake.
Are you confident that you will win the court case?
I live in Africa. One thing you can be sure about in Africa is that tomorrow morning or the day after, you will see the sun. I believe and have no doubt that we will win the fight. We are patient and we hope that Nigeria will be resolved soon.
Are you litigious?
We didn’t take Altech to court. Altech took us to court. I never go out with an intention to hurt anyone. Because of that I don’t expect anyone to be unjust to me. We can expect controversy. As you can see I’m not controversial.
What is your take on South Africa’s telecoms markets?
South Africa can accommodate more players. There’s no doubt about that. Almost every African country that we are in has three or more operators. The difficulty now for South Africans is that the licensing approach allowed two major players to consolidate themselves.
It would have been nice if at that time the regulator had issued four licences. This market would have been far more competitive than it is now. Now it’s going to be difficult for other players to enter the market. – The Star (South Africa).