In the 1980s, One of the World’s Cellphone Hot Spots Was … Zaire
WHY YOU SHOULD CARE
Because tech meccas don’t always conform to stereotype.
On an official state visit to the United States, Zairean President Mobutu Sese Seko was handed a Motorola mobile phone and urged to call home. It was 1985, so he had to be persuaded that the device — which weighed as much as a bottle of wine and boasted a retractable antenna — was not a walkie-talkie. But once he’d spoken to his family in Kinshasa, he needed no further convincing. Joseph Gatt and Miko Rwayitare’s plan was coming together.
Telecel, the company they formally founded a year later, would soon have 3,000 subscribers in Zaire (now the Democratic Republic of Congo) — well before mobile phones were ubiquitous in America. Zaire’s near-defunct fixed-line infrastructure meant that the country’s elite were willing to spend $5,000 on a handset and up to $16 per minute to remain connected. “I had one; it just fitted in my bag,” says Michela Wrong, author of In the Footsteps of Mr. Kurtz and a freelance journalist for Reuters in Kinshasa in the early ’90s. “I wouldn’t have been able to work without it.”
Telecel’s success was “an indictment” on Zaire’s government, says Wrong. “If you lifted a normal telephone up, it simply didn’t work. If Mobutu had managed to “run his country instead of pillage it, Telecel would never have been necessary.”
Despite being impressed, the dictator — like most people in 1985 — hadn’t fully grasped how life-changing the technology would be.
But the company was also a tribute to human ingenuity. Rwayitare (a Rwandan-born engineer who had worked at Zaire’s state-owned mining company before starting his own electronics distributor) and Gatt (an American whose work with Pan Am, Zaire Airlines and the Intercontinental Hotel had given him access to Zaire’s very top brass) didn’t just identify a gap in the market, they also exploited it to perfection.
When the world’s first cellular network was installed in Washington, D.C., in 1983, the two entrepreneurs knew instinctively that cellular could solve many of Africa’s communication problems. But they also recognized the complete dearth of both knowledge and legislation on the continent. “How do you educate a government on what cellular is all about?” asked Gatt in a 2008 interview with AllAfrica.com.
You hand him a mobile phone and get him to call home, of course.
The timing of Mobutu’s U.S. visit was serendipitous, but Gatt still had to persuade National Car Rental to hire out 10 handsets without their accompanying cars, and Rwayitare still had to program the phones to the right frequency. “Thank God it worked,” said Gatt of Mobutu’s first call.
Despite being impressed, the dictator — like most people in 1985 — hadn’t fully grasped how life-changing the technology would be and he initially refused to grant Telecel an operating license. Gatt and Rwayitare knew they were onto a good thing, however, so they used their life savings to purchase an ailing U.S. mobile technology firm and obtained finance from Motorola to erect a small system in Kinshasa. All that remained was to buy a couple of hundred handsets — at $3,000 a pop — and give them to Mobutu and his inner circle.
“These 200 Zairean officials called each other and overseas over the next year without paying for a single call,” writes Sean Ndiho Obedih in a profile of Rwayitare. At the end of the trial period, and faced with the prospect of losing what had now become an essential cog in the state machinery, Mobutu agreed to give them their license … provided they could come up with legislation for the fledgling industry. Gatt and Rwayitare contracted the services of a Paris legal firm, which wrote the regulations from scratch.
Soon, everyone who was anyone in Zaire had a Telecel. The exorbitant cost of both handsets (Gatt and Rwayitare marked them up to $5,000) and calls (that $16 international rate was short-lived, but even local calls averaged $0.36 per minute) only made them more desirable among Zaire’s elite. Wrong “knew [she] was in the presence of greatness when [she] watched Zaire’s leading businessman juggle a row of Telecels on the coffee table in front of him.” (The batteries lasted only 60 minutes so he did have some excuse.)
While Telecel was hugely successful — in the early days it made its owners an average of $800 per user per month — the company did encounter challenges. During a 1991 military pillage, heaps of uninstalled equipment were stolen from a warehouse. The soldiers “found out later there was nothing they could do with it,” said Gatt. “Nobody knew how to put it together.” Nevertheless, it cost Telecel $3 million.
In 1994, a rival company called Comcell sprung up to challenge Telecel’s monopoly. All very well, except Comcell’s big-shot owner, Jean-Pierre Bemba (who would later be charged with war crimes but acquitted by the International Criminal Court), chose to use the exact same frequency as Telecel, thus jamming all communications for months. Eventually Comcell went bust, says Wrong, who “suspects” that “Mobutu made it clear that he needed Telecel to work.”
As mobile technology became cheaper and more advanced (and fixed-line infrastructure on the continent continued to crumble), Telecel and other mobile operators scrambled to capture the rapidly growing African market. In 2000, an Egyptian firm bought 80 percent of Telecel (which had operations in 14 African countries by then) for $413 million. Rwayitare, who went on to own the hotel made famous by the film Hotel Rwanda, died in South Africa in 2007. Gatt, who did not respond to requests for comment, returned to the U.S. and remains involved in telecommunications, according to his LinkedIn profile.
Meanwhile, the industry they had spawned went from strength to strength. In the first decade of the new millennium, mobile growth in Africa averaged a whopping 30 percent each year and there are now half a billion users on the continent. Gatt wasn’t wrong when he said — way back in 1983 — that mobile technology would be “very good for Africa.”