By Karabo Ngoepe
About seven years ago, two businessmen embarked on a journey that many considered Mission Impossible, something that was also in their heads, establishing a telecoms company in the Kingdom of Eswatini.
The two Davids also had a mammoth task ahead of them, taking on what they felt was a Goliath at the time who was deeply entrenched in the telecoms sector. Fast forward to almost seven years, and they are on the path to realising their goal. Michelo Shakantu and the late Victor Gamedze are the two Davids who stood up and created the second-biggest network provider in the Kingdom, Eswatini Mobile.
Reminiscing on where it all started, Shakantu says the pair held discussions for three years on how to enter the market and what it would take to have even a footing. This was uncharted territory for the pair. One was a player in the construction sector and one was a tenderpreneur in the supply chain of telecoms equipment.
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“We were having discussions on venturing into the telco business together. We discussed it for three years and one day, Victor said why don’t we start a mobile company. That was where the idea to start Eswatini Mobile was born. The company that was around had a monopoly for 17 years and we knew that had to end,” Shakantu says as he smiles.
Their discussions came at the right time. There was an outcry in the country during Sibaya, the People’s Parliament where emaSwati complained about expensive packages in the sector. As though written in the stars and fate playing them a through ball to score.
Following Sibaya deliberations, His Majesty King Mswati III said he would love to see more telco players in the market to reduce the cost of communications.
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The process started in August of 2016 and the license was finally awarded in February 2017. The Eswatini Communication Commission’s annual report of 2017 indicated that it had welcomed the passing of the Electronic Communications Regulations in August 2016, which provided the Commission with the necessary legal tools to carry out its licensing mandate.
“I am pleased to report that the Commission licensed another operator, Swazi Mobile Limited, after noting the public outcry, as reiterated during Sibaya submissions, for the introduction of competition in the telecommunications sector,” the Chairperson at the time Sipho Shongwe said in the report.
“From that pronouncement, we were able to grab the opportunity to begin to say how do we set up a telco company. That was the beginning of how we started Eswatini Mobile,” Shakantu said.
Following His Majesty’s call for more players in the sector, there was an open tender process calling on those with capabilities to apply for a license. Companies from all over the world applied, including the two businessmen.
According to the ESSCOM report, the granting of the license was premised on the desire to promote competition in the sector, coupled with an effort to lower the cost of communication in Eswatini.
The Commission issued an Invitation To Apply (ITA), for companies with an interest to provide public telecommunications services in the Kingdom of Eswatini.
“The long, arduous process of evaluating the received applications for a third telecommunications licence was completed in February 2017, which culminated in the issuance of an Individual Electronic Communication Network and Service Licence to Swazi Mobile Limited.”
The regulator described the move at the time as a monumental achievement and a quantum leap in the move towards the awaited liberalisation of the communications sector.
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“This licence ushered in a new era of high-tech communication in the mobile space. For the first time, the Swazi populace will enjoy video calling and send high-volume data from their mobile devices wirelessly. Without a doubt, this licence brought much excitement to the sector and the country as a whole. As part of its drive to lower the cost of communication, the Commission embarked on discussions with the wholesale electronic communications provider, the Swaziland Posts and Telecommunications Corporation, and succeeded in reducing the wholesale price. The strategy was for the wholesale price reduction to trickle down to the retail customer, and be further cascaded to the end-user, translated into lower communication costs, thus resulting in affordable communication services in the country,” the then CEO Mvilawemphi Dlamini said in the report.
Shakantu said the process was an open one which they won convincingly.
“Everyone submitted a bid and we won it,” he said.
Little did the pair know that this would be the start of a very stressful period of their lives. The business required a substantial cash injection. Being novices in the sector, credit doors were not opening.
“Myself and Victor agreed that we would make contributions to start the business and each of us put down E50 million on the table and that’s how we started Eswatini Mobile,” Shakantu said.
Following that, the pair went to search for offices and started engaging service providers. to manufacture equipment. Following the initial investment of E100 million, the partners had to dig deeper into their pockets to continue pumping in the money. They used their existing businesses and personal assets as surety to seek more funds.
“We had to open several credit lines using our businesses to set up the business. The credit lines were well over E200 million using the companies for us to get to the first call that was made in July of 2017,” Shakantu said.
Having invested over E300 million of their own cash, the partners found themselves sitting with a conundrum, they needed to scale up and grow the business but it had hit them hard in the pockets already.
“We went out to the market and sold shares to the Provident Fund which bought 20 per cent and PSPF also bought 20 per cent. We retained 60 per cent. That is how the two came in as partners,” Shakantu said.
The proceeds from the sales of the shares helped the partners pay back some of the loans they had taken. Tragedy would however strike and throw a spanner in the works of the progress that was being made.
Gamadze was killed in January 2018, leaving Shakantu with having to deal with the credit liabilities that existed in the business.
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“I was left with a burden of about E300 million worth of liabilities between the two of us. I’m still paying for that liability to this day. That has been part of the journey for me,” he said.
Despite the liabilities that exist, the business has continued to require cash injections over the years to get it to where it currently is. Shakantu said the joining of the Provident Fund and PSPF assisted in carrying some of the required investments to continue to grow the business.
Eswatini Mobile was the most difficult business to start – Shakantu
Inyatsi Group Holdings Chairman Michelo Shakantu who has successfully steered numerous businesses to success, including a footprint in about 12 African countries says starting Eswatini Mobile was the hardest thing he has ever done.
The More 4 You network which will be celebrating seven years this year has become a force to be reckoned with. It has allowed hundreds of thousands to have access to internet and telecoms connectivity at relatively low prices but the journey has not been without its hurdles.
“Probably one of the most difficult businesses I have started has been Eswatini Mobile. You will be aware that starting something of that magnitude is extremely difficult,” the Eswatini-based businessman says.
“One of the things we faced when Victor (Gamedze) was alive and in the first year was a lack of confidence and the lack of belief from society, stakeholders and suppliers. It was difficult to believe that two businessmen could start a business of this magnitude.”
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The Red network has since its inception found itself having to live in the shadow of its competitor which has been in the market for more than 20 years. It found itself being compared to MTN which has the backing of a multinational mother company while it built itself from the bottom up, without any external backing.
Shakantu remembers the early beginning as though it was just yesterday. He says no one believed the company would still be standing today.
“There was a lot of negativity and naysayers. There was a lot of mistrust and misconceptions and no one believed in us. No one believed that seven years later we would be standing with a market share of 35 per cent, having a customer base of over 500 million and a turnover of E500 million as well,” he said.
The maverick businessman says looking back at the journey, it feels like Tom Cruise’s Mission Impossible movie series. Shakantu and his late business partner managed to pull a rabbit out of the hat and continue to redefine what is possible and show the world that the impossible is merely a state of mind that people use to limit their potential.
“It was extremely difficult. It was Mission Impossible if you ask me,” he says.
Having proved the naysayers wrong and standing the test of time, the network is now thanking its clients by allowing them to win a share of a million. It’s also ensuring that its other partners and shareholders can meaningfully impact the lives of the clients who have allowed them to invest in Eswatini Mobile.
The company recently launched a deal for public servants to get the latest smartphones and defer the payment over 12 months.
Shakantu adds that what the company has been able to achieve is down to His Majesty King Mswati III’s Vision of a first-world country.
“I would like to thank His Majesty King Mswati III because it is from his Vision that we began to think big, think of possibilities of being businessmen of this magnitude and also becoming first-world players. His Majesty’s Vision has played a critical role and it is from His Vision that Eswatini Mobile was born,” Shakantu said.
