Providing a new telecom service

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Mohamed Shameel Aziz Joosub is a South African businessman and CEO of Vodacom, a South African mobile communications company since March 2013. Vodacom is part of the Global Partnership for Ethiopia that signs the telecom licensing agreement with Ethiopia.
Born in Laudium, Transvaal South Africa, Joosub has a Bachelor of Accounting Science degree from the University of South Africa, and a Master of Business Administration degree from the University of Southern Queensland. Before Joosub became CEO of Vodacom, he spent eighteen months as head of Vodafone España. Joosub is a board member of Vodacom and Safaricom, positions he has held since 2012 and 2017, respectively.
Joosub recently visited Ethiopia to attend the signing ceremony of one of the biggest deals is East Africa. The Global Partnership for Ethiopia signs the historical telecom licensing agreement with the government of Ethiopia last week to start its operation in Ethiopia. The consortium, Vodafone, Vodacom, Safaricom, Sumitomo Corporation, and the CDC Group, won one of the two telecom operator licenses bid by offering $850 million. The move will create jobs for 1.5 million citizens and activate over $8 billion in domestic investment. He talked to Capital about the consortium and what their future plan in the telecom sector in the coming years. Excerpts;

 

Capital: What is your feeling about the signing agreement?
Joosub: It is really a historical day for us, we have been pursuing license for more than 12 years looking forward to the day Ethiopia would open up. So for us it is a historical moment it is a very big market and it is a historical moment for Ethiopia as well, and we are quite excited about the opportunity to start our services in Ethiopia to the 110 million people.

Capital: Over the coming ten years you have planned to invest about eight billion dollars in Ethiopia; what kinds of investment is this?
Joosub: First our big investment obviously will be on network equipment. We have to work on the network, and it is really a sophisticated element from the base stations, to core network, to billing systems, the IT system that need to be implemented and the fiber cables. So there’s a lot of network infrastructure and IT systems and of course introducing our platforms into the market as well. As you know, M-Pesa or mobile money will be made available within a year. So the big part of it is rolling out and preparing for mobile money and being able to run mobile money platform. We have to go work on distribution and power and local distribution channels. So there is a lot of investment that is going to be required and we will also be investing into people and growing out their employment but also empowering a lot of small businesses to basically help with the delivery to provide a world-class network in Ethiopia.

Capital: During your operation your company is going to use government infrastructure, so how do you see that, how much profitable is it?
Joosub: So it will be simultaneous in terms of operation. We will be able to use some of Ethio Telecom’s infrastructure but we have got coverage obligation where we have to cover most part of the country within a limited time period, so we have to build quite rapidly to be able to meet those coverage obligations and of course we need the network to be able to carry our own traffic so the quicker you can roll out your own network it is very different and also important for us to be able to provide our own service to our customers.

Capital: What are the challenges you are expecting in the future? And what do you expect from the growing of technologies like over the top (OTTs) services that use the platform of internet providers to sell their products?
Joosub: I think the big part is there will always be OTTs and also we see an opportunity on the one side, there is a change of setting our revenues to the OTTs, but the other side is there are opportunities to work with the OTTs so we work a lot with the OTTs. They also want the coverage and so on, so I think it has opportunity to work with them and to find opportunities to work together.

Capital: How do you plan to overcome the foreign currency shortage in Ethiopia and how are you going to tackle the bureaucracy in different public and government sectors you are going to work with?
Joosub: I think on the foreign currency the plan has been laid out. We reviewed the plain; the government have put a credible plan on foreign currency. So we are quite encouraged with developments with the central bank and conducted very encouraging meetings that we had with the governor of the National Bank of Ethiopia and they promised to us that their doors are always open.
Since the government has publicly shared the plan on the foreign currency which we believe the first steps they are taking is a credible and of course we have also discussed with institutions like the World Bank, IFC and so on, and we are quite encourage with the plan.

Capital: Your 500 million dollar investment in Ethiopia is said to be released from the US government, and recently there are some concerns between the US government and Ethiopia, so does it have any effect on your company?
Joosub: We haven’t finalize that yet, of course the investment for the license come directly from partners in the consortium where they put the money into the fund. There are various financing options that are available and are going forward swiftly.
And of course now that they have got the license, a lot of that becomes more credible and now you start to further discuss with the define entities to look at the cost of funding. Of course there are various forms of funding; There’s development of funding, bank funding, and suppliers funding. So, there’s different sources of funds that you can look at including the investment that we’ve made directly as a consortium. But I think what’s encouraging is, you’ve got a credible consortium, which is made up parties like Sumitomo, CDC, Safaricom, Vodacom and Vodafone.
What we’re doing is we look at the sources of funding and of course, the cheaper you get your funding the more beneficiary you become on the business plan so we will look at all options including some suppliers funding and even when you’re choosing vendors, you consider, what is the suppliers funding that’s available from those particular vendors. As it is part of your decision-making process.
So regarding the US funding we haven’t finalized any funding with anybody. Of course we’ve had lots of discussions now after you actually got the license. First part was being able to pay. The second part is of course this historic awarding ceremony and then you know, now in the coming days and weeks it’s about finalizing suppliers, funding and so on.

Capital: You’re also set to launch low orbit satellites. So, how does it supplementary the existing network in Ethiopian and how much investment does it need?
Joosub: So the whole principle is to make sure that Ethiopia is always up to date with the latest technology. So, you know, we will launch 4G soon and after that we want to launch 5G, we’ve got a partnership with a company as the broader Vodafone group. We are going to beam a signal down from space, so we are always looking for these opportunities to partner. We had the similar opportunity when we looked at Loon in Mozambique. So we do look at these types of opportunities. We believe that our job is to connect people and we will use the most efficient technologies in all times to ensure that the people in the country are fully covered. So in that we will provide certain opportunities, and it’s important to be at the fore front of these new technologies to take full advantage of them.

Capital: How do you asses the current political situation in Ethiopia in regards to your business?
Joosub: I think the political developments are always important in any country where we encourage with the direction of the Ethiopian government. So you know that’s why we’ve simply put, we put our heart for the license and we think it’s important to be able to provide coverage and digital inclusion for the population.