How Billionaire Strive Masiyiwa Almost Lost Everything
Strive Masiyiwa is an African business magnate with a net worth of $3.8 billion. He made most of his money from the telecommunications industry and his investments in fintech and power distribution businesses across Africa.
Building his telecoms company, Econet, in his home country, Zimbabwe, was an arduous task for Masiyiwa. At every turn, he was frustrated by bureaucracy and corruption.
This is why his eventual triumph made him a hero for the times and a popular tycoon in a country ravaged by nepotism.
Business Lessons to Learn from African Billionaire Strive Masiyiwa
Strive Masiyiwa’s hurdles
Masiyiwa’s first challenge in creating Econet was to get past the issues of monopoly raised by Zimbabwe’s regulatory body, the Post and Telecommunications Corporation (PTC).
The regulator had claimed that Econet would monopolise the telecom market, yet the PTC had no plans to deliver the same service as Econet.
Masiyiwa engaged attorneys to determine if PTC’s obstruction was legitimate. Much to the astonishment of many, a judge found no legal basis for PTC’s petition and allowed Strive Masiyiwa permission to proceed.
On the other hand, the government was upset because it saw telephones only as a tool for eavesdropping on individuals rather than a business. Therefore, the verdict was overturned by the Supreme Court.
A weak-willed entrepreneur would have given up right there, but Masiyiwa, who had returned to Zimbabwe from Wales when white rule ended in 1980, turned to the Constitution.
He claimed that the state telephone monopoly’s actions infringed on the right to free speech guaranteed by the Constitution. This was a bold plan at a time when most European governments had yet to liberalise telecoms. However, it was successful.
After the Supreme Court decided in Masiyiwa’s favour in 1995, he began to establish base stations throughout Harare with the assistance of Ericsson, a Swedish mobile phone company.
In a bid to stop Masiyiwa’s moving train, President Robert Mugabe banned private telephone operations in February 1996, with offenders facing a two-year prison sentence.
Swedish Econet colleagues were forced to abandon their equipment and return to their hotels.
Strive Masiyiwa then filed an appeal with the Supreme Court, which declared the decree illegal.
Masiyiwa requested a private cellphone license tender while PTC established its own cellphone business. At this time, several political heavyweights were interested in a private network.
The license was given to Telecel, a group funded by the president’s nephew, Leo Mugabe and others. Masiyiwa filed a lawsuit to gain access to the details of Telecel’s bid, which met only a few of the tender’s technical requirements.
Telecel’s license was suspended, but it was later restored by the telecoms minister, whose spouse was an old business colleague of one of Telecel’s major shareholders.
After a cabinet reshuffle two months later, Masiyiwa’s path was abruptly freed. In December 1997, he received his license, but Telecel’s was revoked.
Masiyiwa was bribed and then intimidated by go-betweens into sharing his business with Telecel’s backers. He walked away from them regardless of how close he was to bankruptcy from the previous years of the legal fight.
Telecel eventually received a new license, but it posed no threat to Econet because Telecel executives were believed to be better at lobbying than running a telephone company.
Strive Masiyiwa consequently established a mobile network in neighbouring Botswana in between court appearances, mostly because he had experience on his side.
Masiyiwa’s company had 10,000 users within a week of starting operations in Zimbabwe.
5 Biggest Industries Contributing to Nigeria’s Economy
Sanwo-Olu vs Gbadebo Rhodes-Vivour & Jandor: What’s their Winning Advantage?
The long awaited gubernatorial election which has generated much interest among political …