Mobile operators MTN, Orange, Millicom & Safaricom, see opportunity in tech startups

Yesterday, Orange Telecom, a French owned mobile telecoms company with operations in a number of African countries, announced the launch of a startup incubator in Niger. The incubator is the third the company has launched after similar ones in Niger and Mauritius.

Earlier in the month, Safaricom’s CEO, Bob Collymore told Bloomberg TV Africa that they are thinking of starting an angel venture startup fund. Safaricom, as you may know were behind the innovative mobile money model as it exists today in several markets, including Zimbabwe as EcoCash.

Last month, Millicom (A Swedish telecoms company) announced the establishment of a tech business incubator in Rwanda.  Millicom is investing a total of US$1 million into the incubator which is called Think. The company says it will provide entrepreneurs with seed financing, structured training and coaching programmes as well as access to Millicom technical resources for product testing and trials and support in accessing outside investors and customers.

Five months ago, MTN announced it would invest a total $400 million into a partnership with Rocket Internet for an internet company building holding company called Africa Internet Holdings (AIH).

MTN and Millcom especially, are clearly determined to succeed on the internet like they have in the mobile telecoms service business. MTN’s plan to pour $400 million in just 4 years alone speaks volumes. And as for Millicom, their existing strong bond with Rocket Internet through a shared investor in Kinnevik, speaks enough of the value they see in the internet into the future. Both realise that if the physical networks they have built are to drive further growth into the future, it will be on the services that use the infrastructure and not the infrastructure itself.

They are seeing beyond just SMS and USSD value added services of mobile money that is the current craze right now with most mobile operators on the continent, but that will indeed be disrupted by the internet into the future. They are investing in that future right now.

Though not immediately apparent right now as MTN is focused on both eCommerce and Marketplace websites while Millicom’s incubator feels general; you could also argue that beyond just embracing internet services that are killing traditional telecoms revenue models, they are investing to become those services.

Safaricom on the other hand doesn’t see itself taking an equity stake in the business. “We want to provide them with funding so we will work with independent venture capitalists to assist them… We can offer to people about $25,000 just to help them.” Collymore says in the interview with Bloomberg. What it probably sees though is that a healthy tech startup ecosystem only helps the platforms they have – their mobile money especially.

Orange’s initiative, called CIPMEN, doesn’t quite make it into what MTN and Millicom are investing in though. CIPMEN doesn’t look like an investment initiative at all but more of an NGO effort with some corporate social responsibility leanings. They offer no money or help getting the money to the incubated tech startups. Instead the offer mentorship, business coaching, network facilitation and business basic services like bookkeeping.

Startups are obviously very risky bets, so its great the platform providers are getting their hands dirty to provide some assistance. But in getting hands dirty they will likely identify even more opportunity that may not be apparent right now. This could be Innovations like prepaid airtime, M-Pesa itself or new unique ways to deliver entertainment content to mobile subscribers.

It’s up to the imagination really. And that’s what’s so special about opening up to enable an ecosystem, other younger minds get to innovate while you focus on enabling and, along with the startup, profiting from it.