Business, African style

Written by Rebecca Gardiner

Most entrepreneurs would have cut and run. But when a military coup plunged Samer Bishay’s plan to bring cheap long-distance service to Ivory Coast into the deep freeze, he stuck it out.

“In Africa, nothing is guaranteed, no matter how guaranteed they say it is or how much of a contract you have,” says Bishay, president and CEO of Iristel Inc., a wholesaler of Internet-based long-distance capacity to telcos in North America, Europe and Africa. The 1999 coup, seven months after Iristel’s founding, came just as the firm was about to launch in Ivory Coast. In an instant, all the government connections Bishay needed for the rollout had fled the country. Bishay had to spend another year building new relationships before he could proceed.

Why bother? The opportunity in Ivory Coast and other African markets was too enticing to let a coup stop him. Land lines were rare, and long-distance service was expensive and unreliable. Iristel’s Voice over Internet Protocol (VoIP) servers would let its telco clients tap pent-up demand among African expats for a cheap way to call home. Seizing this opportunity required more than a willingness to start over if a government were overthrown. Bishay also had to be open-minded about African ways of business that would make some Canadians queasy.

“It’s not like North America, where it’s a little bit of who you know but a lot of what you can do,” he says. “Forget what you can do — it’s who you know.”

Although personal connections matter in Canada, government and business largely follow procedures that don’t depend on special favours. But in most African countries, you’ll get nowhere without help from bureaucrats and local business partners. To enlist their help, you’ll need to meet face to face; relying solely on the phone is a no-no. In Ivory Coast, Bishay worked the phones for three months to connect with local telco execs, then flew down for an almost year-long series of meetings until they were ready to do business. He then paid them “bonuses” so they’d keep their promises.

“I don’t like to call it a bribe. I call it a bonus, because that’s an acceptable term in Canada,” says Bishay, who could more readily accept the practice after spending eight years as a child in Nigeria. “It’s not under the table. It’s understood on every level that you’re giving someone a bonus for his services.”

He says you need a local partner who knows who to pay and how much: “One person might want 2%, another 10%. If you overpay, they might get greedy. If you underpay, the job might not get done. Even if you overpay, the job still might not get done because you might be bribing the wrong guy.”

Bishay’s flexibility has paid off. He estimates 35% of Iristel’s revenue comes from three far-flung African countries, where its 10% margins are somewhat higher than those it makes outside Africa. The firm is doing so well in Africa that it’s expanding into more countries there.

Iristel is also developing a promising new product there as well as in the West: a virtual VoIP roaming service that will allow cellphone users to make calls outside their carrier’s coverage zones without paying long-distance charges. Iristel plans to supply software and hardware free to the operators in return for a cut of monthly subscriber revenue. “If it succeeds,” Bishay says in his understated way, “it will be a big deal.”

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