Digital Reach

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phones in Africa. A number of shareholders invested a total of

USD3.4 billion into Celtel, including the Deutsche Investitions-

und Entwicklungsgesellschaft. The (DEG) began supporting the

network in 2001 and increased its equity funding in 2004 in order

to enable the network to provide attractive products that were

affordable to people with low incomes. The motivation behind

this investment is the belief that mobile telecommunications are

a vital means to promote development, especially small-scale trade

and agriculture through more transparency in price-structures

and market development.

With the help of international development finance institu-

tions, Celtel has managed to achieve a developmental impact in

the countries it is active in. Today, Africa is the first continent

with more mobile phones than fixed line connections. So far more

than 120,000 Celtel distribution outlets have opened around the

continent; over six million people now have phones. Enabling

people to communicate via telephone has had social as well as

economic impacts. Trade and craftsmen are raising their incomes

using mobile phones directly and indirectly, for instance, by

selling Pre-Paid Cards or renting out mobile phones. According

to Celtel, over 3,000 high quality jobs and some 30,000 indirect

jobs have already been created. In addition, governments are prof-

iting through the collection of tax revenues and licence fees.

The sale of Celtel to MTC in May 2005 has brought an attrac-

tive return to Celtel’s investors.

Matthias Goulnik, Senior

Investment Manager at DEG, believes this shows that “invest-

ments in Sub-Saharan Africa can provide a lot of economic

benefits to everybody if one has the right business model and the

right partners.” According to Marten Pieters, Chief Executive

Officer, one of Celtel’s greatest achievements has been “the

substantial extension of our network to reach hundreds of thou-

sands of new customers, some in remote locations without access

to any telecommunications infrastructure before.”

This would

not have been possible without the initial public and private

investments “The excellent backing we have received from our

existing and new shareholders puts us in a strong position to

fulfil both our commitment to Africa as a long term investor and

also our brand promise: ‘Making life better’,” states Dr. Mohamed

Ibrahim, founder and chairman of Celtel. The success of Celtel

can be partialy attributed to the fact that the business model is

closely inclined to people’s needs. Here, the ICT industry has

managed to produce a business model, products and services

that are affordable, available and operable to people with low

incomes. This recipe is not only applicable in the area of infra-

structure provision; software development, for instance, also

needs to consider local demands.

Promoting free and open source software in Asia

The current dependence on proprietary software licences and

international software manufacturers is encumbering small and

medium-sized enterprises (SMEs) in South East Asia. As a result,

the demand for open source-based systems has increased. The

stability of open source systems, their adaptability and possibility

for further development based on the needs of the local economy,

make them attractive to SMEs. Open source offers new and inno-

vative approaches for the development of new business areas.

In particular, says Balthas Seibold, Project Manager at InWent:

“The two fields of customization and service are excellent busi-

ness opportunities for SMEs.”

Seibold recently launched the

project it@foss for Asia – a three-year capacity building

programme funded by BMZ and supported by the European

Union EU Asia IT&C Programme. The overall goal of it@foss is

to strengthen the Free and Open Source Software (FOSS) devel-

opment community in the ASEAN region, namely in Cambodia,

Indonesia, the Philippines, Thailand and Viet Nam, and thereby

advance ICT infrastructure based on open source technology.

The project will offer training for software developers and host

FOSS conferences to strengthen regional ties, including the

sharing of best practices in the area of open source-based busi-

ness approaches. In addition, international capacity building

events involving European developer communities and open

source companies worldwide will create linkages with the inter-

Moblie communications at affordable prices do not only simplify social life but can also create economic opportunities

Photo: JOKER