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Celtel International B.V.: Case Analysis and Review

Using the case "Celtel International B.V." (Harvard Business School case, no. 9-805-061) address the following:

1. General analysis: provide a brief synopsis of the case situation, a brief characterization of the country or regional business environment, an identification of the main problem(s) raised in the case, and your general view of possible solutions if any.
2. Rhodes, one of the founding members of Celtel said: "Yes, Africa posed a unique set of challenges. But it also offered unparalleled opportunities." Describe the challenges Rhodes was referring to and explain how did Celtel overcome them? Can you name a few of the business opportunities in Africa that you think may be potentially successful?
3. Discuss the differences between building a company in the developed world and doing so in emerging markets and in particular in Africa (including issues around liquidity). Describe Celtel's business practices and economic development in Tanzania if any.
4. Mohamed was very careful in choosing the members of Celtel Board of Directors. Comment on how critical were the resources that different Board members brought in to make Celtel a successful operation in the African business environment?
5. Explain how the ethical standard of Celtel (good governance and transparency) may have contributed to the company's growth and operating success. Explore the ways in which it is possible to build significant company with good governance in Africa.
6. In your opinion, what has Mohamed done well? What could he improve? Why? If you were financial investor, would you fund Celtel? Why or why not?

Solution Preview

1. Celtel is a perfect example of a company that has proven the masses wrong by operating successfully in pan-Africa. Though political and natural environments posed constant challenges, Celtel's performance has been steadily increasing. Celtel saw opportunities in Africa, which it addressed despite challenges. Mohammed had different approach to business which was based on good governance and transparency. The board members were not just there for financing but for getting involved with the company. Celtel's investors had to possess two characteristics: the highest levels of business ethics, and the willingness to invest in African telecommunications. By continuously missing funding budgets by underestimating demand, Celtel built its operating network. The company was always short on capital and had to be creative with technology and sweat on assets. Celtel Tanzania presented a good example of challenges encountered in running African cellular operations. However, Celtel addressed all challenges to drive effective operations in the country. Not only did the company changed the way people communicated, but also led to economic development of African countries.
The regional business environment was very unique. It was far away from the developed world and lacked even basic pillars required for running a business. Africa was unsought by many investors who would relate it to poverty and bribery. There were political and natural issues apart from threat of war. Drivers of economic activity included subsistence agriculture, fishing, and mining. Daily wages of African workers were much less than anywhere in the world.
Main problems raised with the case were cash requirement to sustain operations, problems with distribution and infrastructure, revoked licenses, and exchange rate management. To overcome these problems, Celtel needs to devise a strategy for future and focus on the key issues which the company needs to address. It needs to gain more publicity in the market and specifically seek financing in African operations. The company may go for a merger or IPO depending on the market acceptance.

2. Africa, as an emerging nation offers tremendous opportunities to Celtel. The Sub-saharan (SSA) region has been registering positive growth rates. Following are the opportunities for Celtel in Africa:
Liberalization: The liberalization started as early as 1990s with pressure on governments to open up closed portions of their economy. The liberalization particularly saw the focus on ...

Solution Summary

A case analysis and review for Celtel International B.V.

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