The Role of Entrepreneurship in the Development of the African Mobile Telecommunications Industry

Research suggests that adaptations of advanced-economy business models to challenging base of the pyramid (BoP) market conditions involve experimentation. We analyze the conditions that facilitate developing country entrepreneurs to learn about business models and the incentive of local and multinational firms to carry out experiments for BoP adaptations. We test our frameworks’ implications on the evolution of the mobile telecommunications industry across Africa. Contrary to the economic models that posit one-directional investments from the North to the South, our findings suggest a two-step industrialization process. The spillover of modern-industry knowledge from the North through Joint Ventures enables a few entrepreneurial firms in the South to gain access to valuable knowledge with which they actively experiment and, through successful BoP adaptations, gain ownership advantages and further internationalize across the South, catalyzing the growth of the industry. Overall, the thesis shows how these entrepreneurial firms with a particular heritage are at the core and explain most of the development of the mobile industry in sub-Saharan Africa. This thesis further explores the factors that influenced the diffusion of mobile telephony in Africa. Whereas prior research has focused on the role of country and industry characteristics in country-level measures namely the adoption rate of new products and services, price, total investment and employment in related sector, this thesis examines whether such patterns across countries can be influenced by the heterogeneity in quality of firms that enter in those countries. The thesis also presents a set of detailed case studies of pioneering companies, including two of these key entrepreneurial firms with heritage.