SlideShare a Scribd company logo

Issam Darwish, co-founder of IHS Towers, speaks to Forbes Africa

IHS Towers
IHS Towers
IHS TowersMobile Telecommunication

In March 2014, Issam Darwish, CEO and co-founder of IHS Towers, was featured and interviewed exclusively for the cover of Forbes Africa magazine. As CEO of the most successful infrastructure providers in the African telecommunications sector, Issam Darwish made headlines after investing $1 billion to create the necessary infrastructure in Africa in 2013. Despite a turbulent childhood in war-torn Beirut, Darwish always aspired for greatness and dreamed of winning the Nobel Prize for Physics. Darwish graduated with distinction from the American University of Beirut in Lebanon, with a degree in engineering, after his exceptional entry exam results had led the Dean of the school to headhunt him for the course. A meeting with a group of Lebanese businessmen led him into the telecommunications industry, where he was initially tasked with establishing a billing system, before managing satellite systems at MCI. Now responsible for one of the largest telecommunications companies in Africa, Forbes America estimates Darwish to be worth approximately $200 million. Yet it hasn’t been an easy road to success. Darwish may be Lebanese by birth but it is Lagos that he now calls home and, whilst he awaits the formal confirmation of his Nigerian citizenship, the country has shaped his business and personal life for many years. As the deputy managing director of Nigeria’s first GSM, Motophone, he trained 40 Lebanese expatriates, and 500 Nigerians, in technical, billing, sales and marketing in the late nineties. After the Nigerian government privatised telecommunications in 2001, Issam Darwish saw the opportunity to provide infrastructure for the growing network and co-founded IHS Towers. While this proved to be a lucrative market for IHS, a lack of cooperation (and an excess of capital) meant many providers built their own towers without the proper planning to manage them. Whereas, the US telecoms sector was built on competitors partnering to lower costs, it wasn’t until 2008 and the financial crisis that Darwish was able to persuade the Nigerian industry of the value of cooperation. IHS Towers plans to become the largest tower leasing operator on the continent, while Issam Darwish is actively involved in establishing an incubator programme for technology entrepreneurs to develop a cutting edge content platform.

Issam Darwish, co-founder of IHS Towers, speaks to Forbes Africa

1 of 6
Download to read offline
EPIPHANY
FORBES
ALEX OKOSI
12 | FORBES AFRICA MARCH 2014
PHOTOBYXXX
MARCH 2014 FORBES AFRICA | 13
Bus Or Food?
The First Crossroad On The
Path To Being A Millionaire
He spent $1 billion last year and is going to invest
$850 million more this year. These are the high
stakes of $200 million-man Issam Darwish who is
swooping on the lucrative African telecom market
and thinks more about Lagos than Lebanon.
ISSAM DARWISH
FORBES/FOCUS
BY ABISOLA OWOLAWI
PHOTOSBYKELECHIAMADI-OBIFORFORBESAFRICA
I
f you are somewhere in Africa
with a cell phone signal right
now, one man’s job is done.
If you’re without one, the
same man promises to hook
you up .This is at the heart
of the business of Issam Darwish, the
Lebanese-Nigerian who grew up in war
and rose from a desk job to become one
of Africa’s powerful telecom tycoons.
When he got his first job, he was
so poor, that his boss had to lend him
$8,000 to buy a car so he could get to
work. From creating billing systems for
a handful of dollars a week to leading
a telecommunications infrastructure
company in Africa—Darwish is now a
man with a wealth of $200 million as
valued by the FORBES wealth unit in
the United States. He has walked a long
road and you believe him when he says
he has a lot longer to walk yet.
Ambitious, maybe, but this is the
hallmark of a driven, self-taught
entrepreneur who once dreamt about
winning the Nobel Prize for physics in
Oslo when he was a teenager.
Darwish is a bubble of energy, one
who hates the rigidity of business suits,
yet wears one well. As he goes down
memory lane while in his corner office
in Lagos, he is as sharp and eloquent as
a business man, yet as relaxed and witty
as a next door neighbor.
It’s a story that began in Beirut in
Lebanon. This is where Darwish was
born on the cusp of the brutal civil war
that was to tear the country apart. He
was born to a fairly wealthy family, but
with no silver spoon in his mouth.
In the turmoil of civil war, Darwish’s
father lost everything. The family
believed education was the way out. His
father took two jobs and his mother did
embroidery work to keep their children
in private schools in Lebanon. Darwish
senior encouraged his children to read
and rewarded them for finishing books.
Luckily, young Darwish was an
inquisitive bright spark. He nurtured
an interest in electromagnetic fields,
quantum mechanics and relativity.
“I was always the best in my school.
I graduated from the best university—
The American University of Beirut in
Lebanon—and I wanted to do physics, I
14 | FORBES AFRICA MARCH 2014
FORBES FOCUS — ISSAM DARWISH
FORBES
“As a young person growing up in a war-torn area,
our minds were cultured, but not our existence.”
MARCH 2014 FORBES AFRICA | 15
loved the sciences. When I did my SATs (the standardized
tests for college admission in the United States), my
grades were so high the dean of engineering called and
encouraged me to do engineering instead. So, I opted for
computer and communications engineering. I was among
the first set of engineers who graduated from that program
with distinction, barely aged 21,” says Darwish.
“I also understood the value of money at an early stage
in life. During the war, I remember my father would give
me some money before I left for school [and] I’d have to
decide whether I would use that money to eat at school
or to take the bus back home. I had to make a decision
between the two every day.”
Darwish is thankful for these realities.
“As a young person growing up in a war-torn area, our
minds were cultured, but not our existence. You’d hear
the fighting, see people
die, you can’t go to school
for weeks because fights
have broken out, you
experience the effects of
war firsthand and you begin to appreciate the basic things
in life, like electricity, water, fresh air and ultimately life,”
he says.
By 1992, he was armed with an engineering qualification
and a desire for more. Darwish toyed with the idea of
furthering his studies with a Master’s degree in the United
States (US). As he applied, he looked for ways to occupy
himself.
As luck would have it, a group of Lebanese businessmen
returned to Beirut with a partnership with MCI—one
of the largest telecoms carriers in the world back then.
They wanted to set up a network in Lebanon and offered
Darwish the job of creating a billing system.
“I joined the team. While I was there, there was also a
satellite station present and I was fascinated with this. I’d
work on the billing system during the day and come back
at night, with the permission of the CEO, just to learn more
about how it works. That was my first hands-on experience
in telecoms. In a short space of time, I could now operate
the station by myself.”
Soon, Darwish was managing the satellite systems at
MCI. He played an instrumental role in setting up the first
Lebanese mobile network, after a GSM licence was won,
in his role as network manager for Libancell—now called
MTC Touch.
Darwish may be Lebanese by birth, but he is a true
Lagosian at heart. His Nigerian citizenship is expected to
come through this year and has already been awarded a
chieftaincy title, ‘The Adimula of Erin Ile’ by the traditional
king, in Kwara State, northern Nigeria. He knows how to
navigate the streets, from Victoria Island to Lekki, with
his eyes closed; he can even hold his own in pidgin—the
informal lingua franca spoken in Nigeria and parts of West
Africa.
“Lebanon is where I come from but Lagos is home.
When I’m away, anywhere in the world, I think about
Lagos more than I think about Lebanon. This is where I
became a man; this is where I’ve lost money, made money,
made friends. Most of my friends are Nigerians. This is
home for me.”
The call of Lagos came many years ago. Following a
streak of successful network set-ups in his region, investors
approached Darwish to set up a mobile network up in
Nigeria; things weren’t going too well with the license
holders and they needed someone to sort it out. This
coincided with another offer from Britain, but Darwish
plumped for Nigeria.
In 1998, he brought in
around 40 expatriates and
trained at least 500 Nigerians
in technical, billing, sales and
marketing in his role as deputy
managing director of Motophone, Nigeria’s first GSM
operator.
“We created a network in six cities, together with
Motorola and Ericsson. We started selling, we had
thousands of people coming to our points of sale, people
started buying… the license was soon revoked however,
due to transitions in political structure that affected the
financial commitments made by the license holders. This
lasted five or six months. We settled our liabilities and left
things there.”
This was an unpleasant setback in a difficult market. In
those days, infrastructure was thin on the ground. It had
400,000 fixed telephone lines and a mere 2,000 to 3,000
cell phones. Telecommunications was mostly for the rich;
power supply was sporadic, security was a problem, the
ports were in chaos and diesel shortages could go on for
weeks.
“Every logistical aspect was a nightmare but we found
a way to set things up. We had to import generators, there
was also a lack of skilled manpower—most of the skilled
Nigerians were out of the country working overseas,” he
says.
In 2001, the Nigerian government privatized
telecommunications and auctioned the licenses. There was
then a need to build sites to power these networks. This
was a big break for Darwish and gave birth to the leading
telecoms infrastructure company, which he co-founded—
IHS.
“We had built some sites in the past. My partner, brother
and I decided to invest some money in this and build a
few sites. In the beginning, I had to borrow money from
“This is not a sexy business.”
16 | FORBES AFRICA MARCH 2014
FORBES FOCUS — ISSAM DARWISH
FORBES
my father. My partner invested and we borrowed some
money from the banks with an interest rate of 24%. It was
staggering but that was our seed capital. We, however,
made very good margins because we delivered on time and
delivered quality. Motorola gave us our first contract and
we learnt a lot from these guys. Soon, we started running
the management of the sites as well, the business moved
into site management, which was recurring.”
The cost of setting up these towers back then, was
between $250,000 and $300,000. Today, they range
between $150,000 and
$250,000. To cover itself, a
country like Nigeria requires
around 20,000 of these sites.
Power and security, or the
lack of them, are thorns in
Darwish’s side. Each tower
needs at least two generators, automatic transfer switches,
regulators, a massive supply chain to make sure diesel
is bought at the right price and quality. This alone costs
around $3,000 to $4,000 a month.
IHS currently has around 4,000 towers in Nigeria
and more than 10,000 across Africa, with operations in
Nigeria, Cameroon, Côte
d’Ivoire, Sudan, South
Sudan and recently, Zambia
and Rwanda. It is working
on tripling that number.
The rapid growth in
demand wasn’t expected
in the early years. It
meant, when Nigeria tried
to catch up, there was a
mushrooming of towers.
“In Lebanon for instance,
when we started with the
GSM networks, people
thought we’d have 50,000
subscribers in three years.
We had 350,000 by the end
of the first year. In Nigeria,
people thought about a
million subscribers; by the
time they started selling,
they realized everyone
wanted a phone line. They
started setting the towers
up everywhere without
the right planning. All the
service providers were just
scrambling to have these
towers everywhere, so this
was a good period for us,”
says Darwish.
In the US, the mobile industry was built on the idea of
sharing towers and competitors became partners to lower
their costs. This wasn’t the case in Africa. Darwish’s team
had to convince operators it was the way.
“The idea of sharing didn’t even exist back then. They
all had the capital and the sites, but the management of the
site was a headache. They started pushing the management
aspect to us. We started pushing the idea of sharing. By
2008 and 2009, with the financial crisis, output became
low, capital became scarce
and people started thinking
differently and sharing
became an attractive idea.
It was more innovative and
valuable,” he says.
Darwish is impressed
with the booming growth of the telecommunications sector
in Africa and sees voice calls becoming obsolete.
“The future is the smartphone; this is a fact. Africa has
not caught up yet because the operators need to invest
the capital to ensure that the tablet gets cheaper and
cheaper. Africa won’t progress technologically without
the smartphone and tablet
playing a key role. The
continent has not been
able to build the kind of
infrastructure it requires to
satisfy the penetration levels
in voice and broadband that
it requires. The average age
of the population in Nigeria,
for instance, is about 22 to
23. It is a young population
with a burgeoning middle
class. This massive consumer
market is being created and
growing in size and this
enables us to experience the
great growth pattern and the
need to satisfy and cater for
this group,” says Darwish.
On his work with IHS,
he says: “This is not a sexy
business—it is a hardcore,
roll up your sleeves, be an
engineer, jump into the
mess, see how to fix it, be
patient and connect with the
grassroots type of business
and I love every bit of it.
You’re not going to find a lot
of engineers who are also
“Lebanon is where I come from
but Lagos is home.”
IHS tower
IMAGECOURTESYOFIHS
MARCH 2014 FORBES AFRICA | 17
Taking Advantage
Of An Opportunity
BY OLUWOLE ABEGUNDE
Access to funds from shareholders has
been vital in ensuring IHS can build
its own infrastructure and successfully
manage infrastructure for its clients. With
the growing pressures on operators to
manage their network traffic and costs, an
opportunity exists for IHS as International
Data Corporation (IDC) expects service
providers to offload their network assets to
third parties like IHS. This allows operators
to focus on their core business—selling
telecoms services—without having to
worry about infrastructure rollout and
maintenance.
The major challenge in the
telecommunications space in Nigeria is the
lack of reliable power supply. An average
cell site is powered by two diesel generators.
The dependence on these generators
increases the operating expenditure for
infrastructure providers and mobile network
operators. The price of diesel cost and
generator maintenance accounts for more
than 70% of the operating expenditure for
a cell site in Nigeria. Security is another
challenge. In the last two years, there have
been cases of persistent vandalism of fiber
cables and theft of diesel generators from
sites.
The downward pressure on tariffs, driven
in part by competitive forces, has seen
operators’ top line revenue year on year
growth rates decrease. This, coupled with
the ever-rising cost of operations has seen
some Nigerian players falling out of the
market or struggling to make investment.
There is also opportunity for growth
in the infrastructure space in Nigeria. As
of October 2013, there were around 121
million active mobile subscribers. Mobile
penetration has reached 87%. These figures,
to a large extent, are made up of multi-SIM
users, meaning that the actual penetration
rate is far less than what is reported. A
sizable market still needs to be addressed
for new cell phones users in Nigeria. The
increase in subscribers is expected to
boost growth in network capacity and
coverage. To capitalize on this opportunity,
more investment in telecommunication
infrastructure is expected in Nigeria in the
long term.
Oluwole Abegunde is a research analyst for
the IDC in West Africa.
good businessmen.”
In 2009, IHS was listed on
the Nigerian Stock Exchange
and over the past year has raised
more than $1 billion of capital
equity from the likes of the IFC,
the sovereign wealth fund of the
South Korean government—the
country’s first deal in Africa—
and Investec in South Africa. In
December, IHS acquired new
towers in Rwanda and Zambia,
through MTN.
Darwish is looking at more
than just telecommunications
and has an eye for investment in
real estate in the US, Beirut and
Dubai.
He is currently involved in
setting up incubator programs
for aspiring tech entrepreneurs
to develop a content platform.
Everything from social
networking, mobile money,
music and fashion using digital
information is his new area of
interest.
“Content is another area
I’m investing in. I’ve created a
team to look into this. The more
power I create on the broadband
side, the more relevant the
content will become.”
Darwish is also engaged in
community upliftment.
“I like to see things being
built. Improving the quality of
people’s lives is what ultimately
drives me. As long as this is your
drive, you’ll always be successful
and this is why anything I invest
in must be something that
involves the transformation of
people’s lives.”
Darwish has founded other
companies in the US and
Middle East, including Vorex—a
software provider for small
enterprises in the US.
Darwish credits a handful
of names that inspired him to
become a successful tycoon.
He says he learnt a great
deal from Raphael Udeogu,
the former managing director
of Motorola in Nigeria, about
proper corporate governance
processes, systems and
operations. Bashir El-Rufai
taught him about having faith
in people and the value of
goodwill. He also refers to his
partner, William Saad, and his
brother, Mo Darwish, as strong
pillars that have been highly
instrumental to the growth and
sustenance of IHS from the
beginning.
“When we started IHS, we
set a goal to be the leading tower
infrastructure service provider
on the continent in 13 years.
We were young and passionate,
and it is due to Issam’s passion,
leadership, wisdom and skills
in all areas of management,
engineering, finance and
relationship management… that
we were able to achieve all we
have,” says Saad.
IHS, with an average monthly
turnover of $28 million and
which now employs people of
19 different nationalities, has
ambitious plans to become the
largest tower leasing operator on
the continent.
“We’ll be investing heavily in
Nigeria this year. We invested
roughly $1 billion last year, in
Nigeria, Cameroon and Ivory
Coast in building our sites and
buying from operators. This
year, we’ll probably invest more
than $850 million and are also
looking at Zambia, Rwanda,
Senegal and Guinea. I want to
drive IHS and content to the
next level.”
Through war, education,
bureaucracy and new terrains,
Darwish has emerged as a
formidable warrior in the
telecommunications industry
and has ambitious plans to push
the envelope even further.
Ad

Recommended

Remplir la carte de l'orient ancien
Remplir la carte de l'orient ancienRemplir la carte de l'orient ancien
Remplir la carte de l'orient ancienCéline Langlet
 
Understand & Accelerate Sustainable Growth
Understand & Accelerate Sustainable GrowthUnderstand & Accelerate Sustainable Growth
Understand & Accelerate Sustainable GrowthDani Hart
 
Nip 1o korinou_oloim_atyhimata_2010_2011
Nip 1o korinou_oloim_atyhimata_2010_2011Nip 1o korinou_oloim_atyhimata_2010_2011
Nip 1o korinou_oloim_atyhimata_2010_2011serreschools
 
Εγώ, εσύ ... μαζί και διαφορετικοί!!!
Εγώ, εσύ ... μαζί και διαφορετικοί!!!Εγώ, εσύ ... μαζί και διαφορετικοί!!!
Εγώ, εσύ ... μαζί και διαφορετικοί!!!askapinaki
 
Η Πυροσβεστική στο Νηπιαγωγείο μας
Η Πυροσβεστική στο Νηπιαγωγείο μαςΗ Πυροσβεστική στο Νηπιαγωγείο μας
Η Πυροσβεστική στο Νηπιαγωγείο μαςpardimou
 
φθινόπωρο. Ποίημα της Σάσας Καραγιαννίδου - Πέννα που συνοδεύεται από ευχάρισ...
φθινόπωρο. Ποίημα της Σάσας Καραγιαννίδου - Πέννα που συνοδεύεται από ευχάρισ...φθινόπωρο. Ποίημα της Σάσας Καραγιαννίδου - Πέννα που συνοδεύεται από ευχάρισ...
φθινόπωρο. Ποίημα της Σάσας Καραγιαννίδου - Πέννα που συνοδεύεται από ευχάρισ...Σάσα Καραγιαννίδου - Πέννα
 

More Related Content

Viewers also liked

IHS Towers Presents 2017: The New Forces Shaping African Investment
IHS Towers Presents 2017: The New Forces Shaping African Investment IHS Towers Presents 2017: The New Forces Shaping African Investment
IHS Towers Presents 2017: The New Forces Shaping African Investment IHS Towers
 
Corporate Sustainability & Responsibility at IHS Towers
Corporate Sustainability & Responsibility at IHS TowersCorporate Sustainability & Responsibility at IHS Towers
Corporate Sustainability & Responsibility at IHS TowersIHS Towers
 
Michael odoul spunemi-unde-te-doare-
Michael odoul spunemi-unde-te-doare-Michael odoul spunemi-unde-te-doare-
Michael odoul spunemi-unde-te-doare-Profir Lora
 
Llojet e baterive
Llojet e bateriveLlojet e baterive
Llojet e bateriveOrven Bregu
 
Análisis comparativo modelos universitarios
Análisis comparativo   modelos universitariosAnálisis comparativo   modelos universitarios
Análisis comparativo modelos universitariosAndreza Oviedo
 
IHS Towers: Mission and Vision
IHS Towers: Mission and VisionIHS Towers: Mission and Vision
IHS Towers: Mission and VisionIHS Towers
 
El siglo XVII español
El siglo XVII españolEl siglo XVII español
El siglo XVII españolsmerino
 

Viewers also liked (9)

Calendrier général 2013 2014
Calendrier général 2013 2014Calendrier général 2013 2014
Calendrier général 2013 2014
 
IHS Towers Presents 2017: The New Forces Shaping African Investment
IHS Towers Presents 2017: The New Forces Shaping African Investment IHS Towers Presents 2017: The New Forces Shaping African Investment
IHS Towers Presents 2017: The New Forces Shaping African Investment
 
Corporate Sustainability & Responsibility at IHS Towers
Corporate Sustainability & Responsibility at IHS TowersCorporate Sustainability & Responsibility at IHS Towers
Corporate Sustainability & Responsibility at IHS Towers
 
Michael odoul spunemi-unde-te-doare-
Michael odoul spunemi-unde-te-doare-Michael odoul spunemi-unde-te-doare-
Michael odoul spunemi-unde-te-doare-
 
Llojet e baterive
Llojet e bateriveLlojet e baterive
Llojet e baterive
 
Análisis comparativo modelos universitarios
Análisis comparativo   modelos universitariosAnálisis comparativo   modelos universitarios
Análisis comparativo modelos universitarios
 
IHS Towers: Mission and Vision
IHS Towers: Mission and VisionIHS Towers: Mission and Vision
IHS Towers: Mission and Vision
 
El siglo XVII español
El siglo XVII españolEl siglo XVII español
El siglo XVII español
 
Genu varum
Genu varumGenu varum
Genu varum
 

Recently uploaded

Database Set Up Basics Bloomerang Academy
Database Set Up Basics Bloomerang AcademyDatabase Set Up Basics Bloomerang Academy
Database Set Up Basics Bloomerang AcademyBloomerang
 
04 - The Greenhouse Effect.ppt.pptx
04 - The Greenhouse Effect.ppt.pptx04 - The Greenhouse Effect.ppt.pptx
04 - The Greenhouse Effect.ppt.pptxmmpnair0
 
BusinessWritingExamplesFeb2024Litt.pdf
BusinessWritingExamplesFeb2024Litt.pdfBusinessWritingExamplesFeb2024Litt.pdf
BusinessWritingExamplesFeb2024Litt.pdfSteven Litt
 
NADA 2024: Selling Cars on TikTok
NADA 2024: Selling Cars on TikTokNADA 2024: Selling Cars on TikTok
NADA 2024: Selling Cars on TikTokSean Bradley
 
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst..."ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...Rachele Fleming
 
DBX Investor Presentation - Q4 and FY 2023
DBX Investor Presentation - Q4 and FY 2023DBX Investor Presentation - Q4 and FY 2023
DBX Investor Presentation - Q4 and FY 2023Dropbox
 
Trending Topics for events Presentation.pdf
Trending Topics for events Presentation.pdfTrending Topics for events Presentation.pdf
Trending Topics for events Presentation.pdfgaju619
 
Sustainability Roadmap Infographics_final.pdf
Sustainability Roadmap Infographics_final.pdfSustainability Roadmap Infographics_final.pdf
Sustainability Roadmap Infographics_final.pdfJai Babu
 
Communications Trends for Fundraising Success in 2024.pdf
Communications Trends for Fundraising Success in 2024.pdfCommunications Trends for Fundraising Success in 2024.pdf
Communications Trends for Fundraising Success in 2024.pdfBloomerang
 
Ultimate Guide to Choosing the Best Boom Barrier
Ultimate Guide to Choosing the Best Boom BarrierUltimate Guide to Choosing the Best Boom Barrier
Ultimate Guide to Choosing the Best Boom Barriernovusapl
 
The Times 100 Business Case Studies - StayBetterDXB.pdf
The Times 100 Business Case Studies - StayBetterDXB.pdfThe Times 100 Business Case Studies - StayBetterDXB.pdf
The Times 100 Business Case Studies - StayBetterDXB.pdfStayBetterDxb
 
Proof Strategies CanTrust Index 2024
Proof Strategies CanTrust Index 2024Proof Strategies CanTrust Index 2024
Proof Strategies CanTrust Index 2024Proof
 
Deep Dive Petrobras 2024 (Day 1).pdf
Deep Dive Petrobras 2024 (Day 1).pdfDeep Dive Petrobras 2024 (Day 1).pdf
Deep Dive Petrobras 2024 (Day 1).pdfsteevesroy1
 
MM Workshop Feb 2024 One Page Retirement Plan Simplified.pdf
MM Workshop Feb 2024 One Page Retirement Plan Simplified.pdfMM Workshop Feb 2024 One Page Retirement Plan Simplified.pdf
MM Workshop Feb 2024 One Page Retirement Plan Simplified.pdfLogan Parks
 
New Zealand Franchising Confidence Index | January 2024
New Zealand Franchising Confidence Index | January 2024New Zealand Franchising Confidence Index | January 2024
New Zealand Franchising Confidence Index | January 2024Franchize Consultants
 
The Economic Benefits of Reshoring to Mexico
The Economic Benefits of Reshoring to MexicoThe Economic Benefits of Reshoring to Mexico
The Economic Benefits of Reshoring to MexicoNovaLink
 

Recently uploaded (20)

Database Set Up Basics Bloomerang Academy
Database Set Up Basics Bloomerang AcademyDatabase Set Up Basics Bloomerang Academy
Database Set Up Basics Bloomerang Academy
 
04 - The Greenhouse Effect.ppt.pptx
04 - The Greenhouse Effect.ppt.pptx04 - The Greenhouse Effect.ppt.pptx
04 - The Greenhouse Effect.ppt.pptx
 
BusinessWritingExamplesFeb2024Litt.pdf
BusinessWritingExamplesFeb2024Litt.pdfBusinessWritingExamplesFeb2024Litt.pdf
BusinessWritingExamplesFeb2024Litt.pdf
 
NADA 2024: Selling Cars on TikTok
NADA 2024: Selling Cars on TikTokNADA 2024: Selling Cars on TikTok
NADA 2024: Selling Cars on TikTok
 
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst..."ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...
 
DBX Investor Presentation - Q4 and FY 2023
DBX Investor Presentation - Q4 and FY 2023DBX Investor Presentation - Q4 and FY 2023
DBX Investor Presentation - Q4 and FY 2023
 
Trending Topics for events Presentation.pdf
Trending Topics for events Presentation.pdfTrending Topics for events Presentation.pdf
Trending Topics for events Presentation.pdf
 
Bryan_Cassady - AI Powered Innovation.pdf
Bryan_Cassady - AI Powered Innovation.pdfBryan_Cassady - AI Powered Innovation.pdf
Bryan_Cassady - AI Powered Innovation.pdf
 
Sustainability Roadmap Infographics_final.pdf
Sustainability Roadmap Infographics_final.pdfSustainability Roadmap Infographics_final.pdf
Sustainability Roadmap Infographics_final.pdf
 
Carol Scott - How to Thrive in the AI Era.pdf
Carol Scott - How to Thrive in the AI Era.pdfCarol Scott - How to Thrive in the AI Era.pdf
Carol Scott - How to Thrive in the AI Era.pdf
 
Diamond Earrings
Diamond EarringsDiamond Earrings
Diamond Earrings
 
Samriddhi 2023 - 24
Samriddhi 2023 - 24Samriddhi 2023 - 24
Samriddhi 2023 - 24
 
Communications Trends for Fundraising Success in 2024.pdf
Communications Trends for Fundraising Success in 2024.pdfCommunications Trends for Fundraising Success in 2024.pdf
Communications Trends for Fundraising Success in 2024.pdf
 
Ultimate Guide to Choosing the Best Boom Barrier
Ultimate Guide to Choosing the Best Boom BarrierUltimate Guide to Choosing the Best Boom Barrier
Ultimate Guide to Choosing the Best Boom Barrier
 
The Times 100 Business Case Studies - StayBetterDXB.pdf
The Times 100 Business Case Studies - StayBetterDXB.pdfThe Times 100 Business Case Studies - StayBetterDXB.pdf
The Times 100 Business Case Studies - StayBetterDXB.pdf
 
Proof Strategies CanTrust Index 2024
Proof Strategies CanTrust Index 2024Proof Strategies CanTrust Index 2024
Proof Strategies CanTrust Index 2024
 
Deep Dive Petrobras 2024 (Day 1).pdf
Deep Dive Petrobras 2024 (Day 1).pdfDeep Dive Petrobras 2024 (Day 1).pdf
Deep Dive Petrobras 2024 (Day 1).pdf
 
MM Workshop Feb 2024 One Page Retirement Plan Simplified.pdf
MM Workshop Feb 2024 One Page Retirement Plan Simplified.pdfMM Workshop Feb 2024 One Page Retirement Plan Simplified.pdf
MM Workshop Feb 2024 One Page Retirement Plan Simplified.pdf
 
New Zealand Franchising Confidence Index | January 2024
New Zealand Franchising Confidence Index | January 2024New Zealand Franchising Confidence Index | January 2024
New Zealand Franchising Confidence Index | January 2024
 
The Economic Benefits of Reshoring to Mexico
The Economic Benefits of Reshoring to MexicoThe Economic Benefits of Reshoring to Mexico
The Economic Benefits of Reshoring to Mexico
 

Issam Darwish, co-founder of IHS Towers, speaks to Forbes Africa

  • 1. EPIPHANY FORBES ALEX OKOSI 12 | FORBES AFRICA MARCH 2014 PHOTOBYXXX
  • 2. MARCH 2014 FORBES AFRICA | 13 Bus Or Food? The First Crossroad On The Path To Being A Millionaire He spent $1 billion last year and is going to invest $850 million more this year. These are the high stakes of $200 million-man Issam Darwish who is swooping on the lucrative African telecom market and thinks more about Lagos than Lebanon. ISSAM DARWISH FORBES/FOCUS BY ABISOLA OWOLAWI PHOTOSBYKELECHIAMADI-OBIFORFORBESAFRICA I f you are somewhere in Africa with a cell phone signal right now, one man’s job is done. If you’re without one, the same man promises to hook you up .This is at the heart of the business of Issam Darwish, the Lebanese-Nigerian who grew up in war and rose from a desk job to become one of Africa’s powerful telecom tycoons. When he got his first job, he was so poor, that his boss had to lend him $8,000 to buy a car so he could get to work. From creating billing systems for a handful of dollars a week to leading a telecommunications infrastructure company in Africa—Darwish is now a man with a wealth of $200 million as valued by the FORBES wealth unit in the United States. He has walked a long road and you believe him when he says he has a lot longer to walk yet. Ambitious, maybe, but this is the hallmark of a driven, self-taught entrepreneur who once dreamt about winning the Nobel Prize for physics in Oslo when he was a teenager. Darwish is a bubble of energy, one who hates the rigidity of business suits, yet wears one well. As he goes down memory lane while in his corner office in Lagos, he is as sharp and eloquent as a business man, yet as relaxed and witty as a next door neighbor. It’s a story that began in Beirut in Lebanon. This is where Darwish was born on the cusp of the brutal civil war that was to tear the country apart. He was born to a fairly wealthy family, but with no silver spoon in his mouth. In the turmoil of civil war, Darwish’s father lost everything. The family believed education was the way out. His father took two jobs and his mother did embroidery work to keep their children in private schools in Lebanon. Darwish senior encouraged his children to read and rewarded them for finishing books. Luckily, young Darwish was an inquisitive bright spark. He nurtured an interest in electromagnetic fields, quantum mechanics and relativity. “I was always the best in my school. I graduated from the best university— The American University of Beirut in Lebanon—and I wanted to do physics, I
  • 3. 14 | FORBES AFRICA MARCH 2014 FORBES FOCUS — ISSAM DARWISH FORBES “As a young person growing up in a war-torn area, our minds were cultured, but not our existence.”
  • 4. MARCH 2014 FORBES AFRICA | 15 loved the sciences. When I did my SATs (the standardized tests for college admission in the United States), my grades were so high the dean of engineering called and encouraged me to do engineering instead. So, I opted for computer and communications engineering. I was among the first set of engineers who graduated from that program with distinction, barely aged 21,” says Darwish. “I also understood the value of money at an early stage in life. During the war, I remember my father would give me some money before I left for school [and] I’d have to decide whether I would use that money to eat at school or to take the bus back home. I had to make a decision between the two every day.” Darwish is thankful for these realities. “As a young person growing up in a war-torn area, our minds were cultured, but not our existence. You’d hear the fighting, see people die, you can’t go to school for weeks because fights have broken out, you experience the effects of war firsthand and you begin to appreciate the basic things in life, like electricity, water, fresh air and ultimately life,” he says. By 1992, he was armed with an engineering qualification and a desire for more. Darwish toyed with the idea of furthering his studies with a Master’s degree in the United States (US). As he applied, he looked for ways to occupy himself. As luck would have it, a group of Lebanese businessmen returned to Beirut with a partnership with MCI—one of the largest telecoms carriers in the world back then. They wanted to set up a network in Lebanon and offered Darwish the job of creating a billing system. “I joined the team. While I was there, there was also a satellite station present and I was fascinated with this. I’d work on the billing system during the day and come back at night, with the permission of the CEO, just to learn more about how it works. That was my first hands-on experience in telecoms. In a short space of time, I could now operate the station by myself.” Soon, Darwish was managing the satellite systems at MCI. He played an instrumental role in setting up the first Lebanese mobile network, after a GSM licence was won, in his role as network manager for Libancell—now called MTC Touch. Darwish may be Lebanese by birth, but he is a true Lagosian at heart. His Nigerian citizenship is expected to come through this year and has already been awarded a chieftaincy title, ‘The Adimula of Erin Ile’ by the traditional king, in Kwara State, northern Nigeria. He knows how to navigate the streets, from Victoria Island to Lekki, with his eyes closed; he can even hold his own in pidgin—the informal lingua franca spoken in Nigeria and parts of West Africa. “Lebanon is where I come from but Lagos is home. When I’m away, anywhere in the world, I think about Lagos more than I think about Lebanon. This is where I became a man; this is where I’ve lost money, made money, made friends. Most of my friends are Nigerians. This is home for me.” The call of Lagos came many years ago. Following a streak of successful network set-ups in his region, investors approached Darwish to set up a mobile network up in Nigeria; things weren’t going too well with the license holders and they needed someone to sort it out. This coincided with another offer from Britain, but Darwish plumped for Nigeria. In 1998, he brought in around 40 expatriates and trained at least 500 Nigerians in technical, billing, sales and marketing in his role as deputy managing director of Motophone, Nigeria’s first GSM operator. “We created a network in six cities, together with Motorola and Ericsson. We started selling, we had thousands of people coming to our points of sale, people started buying… the license was soon revoked however, due to transitions in political structure that affected the financial commitments made by the license holders. This lasted five or six months. We settled our liabilities and left things there.” This was an unpleasant setback in a difficult market. In those days, infrastructure was thin on the ground. It had 400,000 fixed telephone lines and a mere 2,000 to 3,000 cell phones. Telecommunications was mostly for the rich; power supply was sporadic, security was a problem, the ports were in chaos and diesel shortages could go on for weeks. “Every logistical aspect was a nightmare but we found a way to set things up. We had to import generators, there was also a lack of skilled manpower—most of the skilled Nigerians were out of the country working overseas,” he says. In 2001, the Nigerian government privatized telecommunications and auctioned the licenses. There was then a need to build sites to power these networks. This was a big break for Darwish and gave birth to the leading telecoms infrastructure company, which he co-founded— IHS. “We had built some sites in the past. My partner, brother and I decided to invest some money in this and build a few sites. In the beginning, I had to borrow money from “This is not a sexy business.”
  • 5. 16 | FORBES AFRICA MARCH 2014 FORBES FOCUS — ISSAM DARWISH FORBES my father. My partner invested and we borrowed some money from the banks with an interest rate of 24%. It was staggering but that was our seed capital. We, however, made very good margins because we delivered on time and delivered quality. Motorola gave us our first contract and we learnt a lot from these guys. Soon, we started running the management of the sites as well, the business moved into site management, which was recurring.” The cost of setting up these towers back then, was between $250,000 and $300,000. Today, they range between $150,000 and $250,000. To cover itself, a country like Nigeria requires around 20,000 of these sites. Power and security, or the lack of them, are thorns in Darwish’s side. Each tower needs at least two generators, automatic transfer switches, regulators, a massive supply chain to make sure diesel is bought at the right price and quality. This alone costs around $3,000 to $4,000 a month. IHS currently has around 4,000 towers in Nigeria and more than 10,000 across Africa, with operations in Nigeria, Cameroon, Côte d’Ivoire, Sudan, South Sudan and recently, Zambia and Rwanda. It is working on tripling that number. The rapid growth in demand wasn’t expected in the early years. It meant, when Nigeria tried to catch up, there was a mushrooming of towers. “In Lebanon for instance, when we started with the GSM networks, people thought we’d have 50,000 subscribers in three years. We had 350,000 by the end of the first year. In Nigeria, people thought about a million subscribers; by the time they started selling, they realized everyone wanted a phone line. They started setting the towers up everywhere without the right planning. All the service providers were just scrambling to have these towers everywhere, so this was a good period for us,” says Darwish. In the US, the mobile industry was built on the idea of sharing towers and competitors became partners to lower their costs. This wasn’t the case in Africa. Darwish’s team had to convince operators it was the way. “The idea of sharing didn’t even exist back then. They all had the capital and the sites, but the management of the site was a headache. They started pushing the management aspect to us. We started pushing the idea of sharing. By 2008 and 2009, with the financial crisis, output became low, capital became scarce and people started thinking differently and sharing became an attractive idea. It was more innovative and valuable,” he says. Darwish is impressed with the booming growth of the telecommunications sector in Africa and sees voice calls becoming obsolete. “The future is the smartphone; this is a fact. Africa has not caught up yet because the operators need to invest the capital to ensure that the tablet gets cheaper and cheaper. Africa won’t progress technologically without the smartphone and tablet playing a key role. The continent has not been able to build the kind of infrastructure it requires to satisfy the penetration levels in voice and broadband that it requires. The average age of the population in Nigeria, for instance, is about 22 to 23. It is a young population with a burgeoning middle class. This massive consumer market is being created and growing in size and this enables us to experience the great growth pattern and the need to satisfy and cater for this group,” says Darwish. On his work with IHS, he says: “This is not a sexy business—it is a hardcore, roll up your sleeves, be an engineer, jump into the mess, see how to fix it, be patient and connect with the grassroots type of business and I love every bit of it. You’re not going to find a lot of engineers who are also “Lebanon is where I come from but Lagos is home.” IHS tower IMAGECOURTESYOFIHS
  • 6. MARCH 2014 FORBES AFRICA | 17 Taking Advantage Of An Opportunity BY OLUWOLE ABEGUNDE Access to funds from shareholders has been vital in ensuring IHS can build its own infrastructure and successfully manage infrastructure for its clients. With the growing pressures on operators to manage their network traffic and costs, an opportunity exists for IHS as International Data Corporation (IDC) expects service providers to offload their network assets to third parties like IHS. This allows operators to focus on their core business—selling telecoms services—without having to worry about infrastructure rollout and maintenance. The major challenge in the telecommunications space in Nigeria is the lack of reliable power supply. An average cell site is powered by two diesel generators. The dependence on these generators increases the operating expenditure for infrastructure providers and mobile network operators. The price of diesel cost and generator maintenance accounts for more than 70% of the operating expenditure for a cell site in Nigeria. Security is another challenge. In the last two years, there have been cases of persistent vandalism of fiber cables and theft of diesel generators from sites. The downward pressure on tariffs, driven in part by competitive forces, has seen operators’ top line revenue year on year growth rates decrease. This, coupled with the ever-rising cost of operations has seen some Nigerian players falling out of the market or struggling to make investment. There is also opportunity for growth in the infrastructure space in Nigeria. As of October 2013, there were around 121 million active mobile subscribers. Mobile penetration has reached 87%. These figures, to a large extent, are made up of multi-SIM users, meaning that the actual penetration rate is far less than what is reported. A sizable market still needs to be addressed for new cell phones users in Nigeria. The increase in subscribers is expected to boost growth in network capacity and coverage. To capitalize on this opportunity, more investment in telecommunication infrastructure is expected in Nigeria in the long term. Oluwole Abegunde is a research analyst for the IDC in West Africa. good businessmen.” In 2009, IHS was listed on the Nigerian Stock Exchange and over the past year has raised more than $1 billion of capital equity from the likes of the IFC, the sovereign wealth fund of the South Korean government—the country’s first deal in Africa— and Investec in South Africa. In December, IHS acquired new towers in Rwanda and Zambia, through MTN. Darwish is looking at more than just telecommunications and has an eye for investment in real estate in the US, Beirut and Dubai. He is currently involved in setting up incubator programs for aspiring tech entrepreneurs to develop a content platform. Everything from social networking, mobile money, music and fashion using digital information is his new area of interest. “Content is another area I’m investing in. I’ve created a team to look into this. The more power I create on the broadband side, the more relevant the content will become.” Darwish is also engaged in community upliftment. “I like to see things being built. Improving the quality of people’s lives is what ultimately drives me. As long as this is your drive, you’ll always be successful and this is why anything I invest in must be something that involves the transformation of people’s lives.” Darwish has founded other companies in the US and Middle East, including Vorex—a software provider for small enterprises in the US. Darwish credits a handful of names that inspired him to become a successful tycoon. He says he learnt a great deal from Raphael Udeogu, the former managing director of Motorola in Nigeria, about proper corporate governance processes, systems and operations. Bashir El-Rufai taught him about having faith in people and the value of goodwill. He also refers to his partner, William Saad, and his brother, Mo Darwish, as strong pillars that have been highly instrumental to the growth and sustenance of IHS from the beginning. “When we started IHS, we set a goal to be the leading tower infrastructure service provider on the continent in 13 years. We were young and passionate, and it is due to Issam’s passion, leadership, wisdom and skills in all areas of management, engineering, finance and relationship management… that we were able to achieve all we have,” says Saad. IHS, with an average monthly turnover of $28 million and which now employs people of 19 different nationalities, has ambitious plans to become the largest tower leasing operator on the continent. “We’ll be investing heavily in Nigeria this year. We invested roughly $1 billion last year, in Nigeria, Cameroon and Ivory Coast in building our sites and buying from operators. This year, we’ll probably invest more than $850 million and are also looking at Zambia, Rwanda, Senegal and Guinea. I want to drive IHS and content to the next level.” Through war, education, bureaucracy and new terrains, Darwish has emerged as a formidable warrior in the telecommunications industry and has ambitious plans to push the envelope even further.