Does Abuja Hilton Pay the highest management fee in the world?

By Chika Onyeani

In the last four weeks, the internet has exploded with Google Adsense ads, touting 3.9¢ a minute phone call to Nigeria.  First, I thought the ad was targeted to my website, www.africansuntimes.com, as a lot of Nigerians go to the site.  But then, I started seeing the advertisement in virtually every website that I clicked.  The ad drew my attention, of course, since I make a lot of calls to Nigeria and other African countries.  What I have discovered is that Nigeria is the cheapest country to call in Africa, at least from the U.S., followed by South Africa in terms of mobile costs.

First, I saw that the ad for 3.9¢ was for landlines.  I said, wow, who uses landlines in Nigeria now?  Practically anybody I know in Nigeria uses mobile and the cost for a minute call was 6.9¢.  I found that deceptive.  The company, Rebtel, clearly knows this: that people in Nigeria don’t use landlines but rather than offer the 6.9¢ as the right cost it deceives people with an ad for 3.9¢.  When you sign, you are practically paying 7¢ a minute.

This is no doubt far cheaper than what the major networks charge, including AT&T, Verizon, Sprint and T-Mobile.  I subscribe to Sprint: Standard rate call to a landline in Nigeria is $2.67 per minute; call to a mobile is $2.78 per minute.  Then Sprint has what it calls Sprint International Freedom Call and Text, which is priced at $0.49 per minute for landline and $0.60.  I, on the other hand, use a phone system that I buy from my Senegalese supplier that gives me 625 minutes for $20 on my calls to Nigeria, which is more than double the 300 minutes you would get with Rebtel.

Rebtel was founded in 2006 by two Swedish nationals, Hjalmar Winbladh and Jonas Lindroth.  Hjalmar Winbladh had earlier co-founded and spent 7 years as President and CEO of Sendit AB, taking the firm public before it was acquired by Micfrosoft for $127.5 million.  The company has 75 employees and over 25 million users worldwide.

On January 14, 2014, on an article datelined from Lagos, Nigeria, the Wall Street Journal correspondent, Anton Troianovski, in an article titled, “German Firms Seed Web Shopping in the Developing Worold,” was about Mr. Oliver Samwer, “an internet tycoon in Berlin who had already cloned American e-commerce businesses for Europe’s market.”  The article made it plain that Samwer was not in the business of building a new mouse trap, but rather cloning successful businesses that Americans had already started.

According to the Journal article, what Samwer had done was duplicate companies like Amazon in Nigeria, where “Nigerian men on motobikes ply the streets of the chaotic megacity of Lagos delivering toothpaste, English soccer jerseys and women’s wigs in a small and unprofitable, but growing, online shopping business.”

“They are the vanguard in a race to hook the developing world on American-style e-commerce.  It is a contest in which the U.S. companies that largely created the businesses are less dominant than they are in the West.  Playing a major role, instead, are businesses with roots in Germany, an economy that has excelled at refining and exporting 20th–century technologies rather than digital innovation.”

On July 23, 2013, Bloomberg profiled the three major hotel chains in the U.S. that are rushing to Africa to build more hotels.  In the article, “Hilton Leads Rush to Africa in Fastest Boom: Real Estate”, it detailed how Marriott International Inc., Starwood Hotels & Resorts Worldwide, Inc., and Hilton Wordwide Inc. “are turning to Africa, where a growing middle class and rising travel are fueling the fastest pace of hotel development in the world.

These hotel chains are charging some of the highest amounts for hotel rooms in the world. “In Abuja, a shortage of high-end hotels combined with rising demand, allows Hilton to charge more than $400 a night for its rooms – and lets the hotelier collect some of the highest management fees in the world.”

Increasingly, it has become apparent that there is a new scramble for Africa – this time economic in nature.  The new European “explorers” have arrived, this time with a weapon that we all know has leveled the playing field for anyone who cares to grab and run with it.  It amazes me how we continue to blabber about our growing world standing, when we are being humiliated economically and how in the next ten years, we will again become a conquered continent economically – this time we become vassals to the rest of the world.

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