Student Investigates Telecommunication Industries in Adverse Economic Environments

Mohammad Jahanbakht  A recent report of the World Bank highlights that the access to mobile phone devices in África is more common than running water, banking services or even electricity. In some of the Portuguese speaking countries, the numbers are massive: in Cape Verde four out of five citizens already own a mobile phone; and in Angola the number of active SIM cards tripled from 5.2 million in 2007 to 14.2 million registered at the end of 2012. 

This report entitled The Transformational Use of Information and Communication Technologies in Africa (eTransform Africa 2012), was prepared jointly by the World Bank and the African Development Bank in cooperation with the Africa Union. “This report is not directly related to my work but in my first paper, I mention the industries that were empowered from mobile communications in Africa,” said Mohammad Jahanbakht, a dual degree doctoral student in Technological Change and Entrepreneurship, at Instituto Superior Técnico of the Universidade de Lisboa, Católica-Lisbon School of Business and Economics, and Carnegie Mellon University.  

 

Mohammad Jahanbakht defined the study of the African Mobile Industry as the starting point of his research. “What makes this research very exciting is the fact that these industries usually require investments from Multinational Corporations in the host country,” but “in the adverse business environments of dysfunctional economies (such as most sub Saharan Africa), these multinationals hold their entry until the business conditions get improved,” he explained. Furthermore, “we see the presence of several private corporations that were started and managed by the African entrepreneurs that compete with the funded multinational corporations.” One of the examples is “Celtel, founded by Mo Ibrahim, that quickly spanned from its first operation in Uganda in 1995 to 13 African countries by 2005 and was sold for 3.4 billion dollars.” Mohammad Jahanbakht explains: “The heart of my research seeks to offer an explanation for a mechanism for such industry development.” 

 
Since 2009/2010, when he began his doctoral studies, Mohammad Jahanbakht has been working with "Human Capital, Knowledge Based Firms, and the Entrepreneurial Life-Cycle," a research project carried out in the scope of the CMU Portugal Program, funded by the Portuguese Fundação para a CIência e a Tecnologia. In the summer of 2012, Mohammad Jahanbakht did an internship at the World Bank, focusing “mainly on high growth entrepreneurship in Africa,” in line with his Ph.D. research. This experience gave him access to a part of the data that he is using for his main paper. 

One year from completing his dual doctoral degree, at Instituto Superior Técnico of the Universidade de Lisboa (IST/UL), Católica Lisbon School of Business and Economics, and Carnegie Mellon University, Mohammad Jahanbakht sees himself going into both academic or non-academic careers, but favors “a post-doc which eventually leads to an academic position.”

CMU Portugal: You defended your dissertation proposal earlier this year, on the topic "The Role Of Entrepreneurship In The African Mobile Industry Growth." What were your main findings so far? 
Mohammad Jahanbakht (MJ): My thesis aims to shed light on the mechanisms behind the growth of capital and knowledge intensive industries in dysfunctional economies, in the context of mobile telecommunication industries across Africa. Several countries in Africa have always had an unfavorable environment for economic development; during the latter half of the 20th century, many countries, like Zimbabwe, Burundi, Rwanda and Cameroon, had several years of negative GDP growth, poor institutions and insufficient infrastructure. Many were ranked at the top of the corruption index, and some even faced frequent political turmoil. Yet, despite such adverse conditions, the mobile telecommunication industry has experienced an unexpected phenomenal growth.
 
CMU Portugal: What is the aim of your research? 
MJ: These dysfunctional economies usually suffer from weak infrastructure. Our data is on the mobile operating industry in Africa. What makes this research very exciting is the fact that these industries usually require an investment from Multinational Corporations in the host country (in this case Sub Saharan Africa). This investment would bring the initial capital and knowhow, and subsequent transfer of knowhow through local firms might occur. However, in the adverse business environment of dysfunctional economies (such as most Sub-Saharan Africa), these multinationals hold their entry until the business conditions described above are improved. The question that then comes to mind is which firms enter African countries, such as Malawi, Rwanda, etc., and develop those markets? My research aims to explain a mechanism for such industry development.
 
CMU Portugal: Why have you decided to take the African mobile industry as a case study? 
MJ: The initial inspiration came in 2009, when I was a first year Ph.D. student. I read an article about Mo Ibrahim, a Sudanese-born entrepreneur and the lead founder of Celtel, a pan-African mobile operator, in 1995. Mr. Ibrahim sold Celtel in 2005 for 3.6 billion dollars. The interesting point was that Celtel was not backed by the government nor a major multinational operator like Vodafone, France Telecom or Portugal Telecom, but it was able to reach an astonishing success in a short time and in an extremely adverse business environment.
 
CMU Portugal: What has it been like being able to work with two different advisors, from two different countries? 
MJ: This has been a very rich experience. My main advisor is Professor Francisco Veloso, who is currently the dean of Católica Lisbon School for Business and Economics. My co-advisors are Professor David Hounshell, at Carnegie Mellon University, and Professor Romel Mostafa, at Ivey Business School, in Canada. I also have Professors Miguel Amaral and Rui Baptista in my committee. I work closely with one of my advisors and coordinate the progress of the research with the others. I have stayed about six months in Canada, about two years at Carnegie Mellon, and about two years in Lisbon.
 
CMU Portugal: How important was the opportunity to do an internship during your doctoral studies? 
MJ: I had the opportunity to work in the World Bank in the summer of 2012, with the kind support of my main advisor. I worked with Dr. Iacovone at the Innovation, Technology and Entrepreneurship (ITE) group, within the Financial and Private Sector Development network. My work there was mainly on high growth entrepreneurship in Africa, very much in line with my Ph.D. research. I was also able to access a part of the data that I am using for my main paper.
 
December 2013