Loud and Clear..Somalia’s telecom industry is booming!

Somalia is currently in the midst of a telecommunications boom driven by private investors, who have created a mass market with the cheapest calling rates in Africa.  Private investors have put an estimated $194 million into Somalia’s telecommunications sector over the last ten years.

Figures obtained through ICT Labs International in 2010 indicate that there are over 1.5 million mobile phone lines in Somalia, where six telecommunication companies thrive amid Internet users who number more than 2 million.  Fierce competitions among a handful of companies have allowed calling rates to fall to less than one cent per minute.

A telecommunication uplink dish in Mogadishu

Statistics compiled by the World Bank say that Somalia has about 100,000 landline telephones in use, but about 734,800 people were using mobile phones as of 2007.

Out of 74 towns in Somalia, 47 have had telephone coverage over the past eight years, according to the UN-funded Somali Telecom Association (STA). These are impressive phone use statistics compared to other more peaceful countries across Africa.

The telephone companies that provide much of the service across the war-torn country include Golis Telecom Somalia, Hormuud, NationLink Telecom, Somali Telecom Group, Galkom, Global Internet Company, Telcom, Netco, Somafone, Telcom Puntland and Telenet International.  These companies are ready to wire home or office in few hours and provide crystal-clear service, including international long distance for less than $10 a month.  Competing phone companies have also agreed on interconnection standards, which were brokered by the STA.

The telecommunications systems are also improving banking ability for many Somalis. Although Somalia’s population routed much of their investment money through the famous money remittance systems (Hawala), the introduction of competition in mobile communications and internet service provision brought the most dramatic changes in the sector.  A new mobile money transfer service was unveiled by Somalia’s biggest mobile service provider with the help of Kenya’s Safaricom, which pioneered the system of transferring money by mobile phone in East Africa.

Hormuud Telecom, the biggest network in Somalia with more than a million subscribers, designed a money transfer service for its registered customers much as Safaricom has. The system helps the customers transfer cash to friends and relatives, reliving them from the risk of carrying huge wads of the money.

Abdi Jama is a renowned trader in Bakara market, Mogadishu’s most vibrant business district.  Jama said the money transfer system greatly helped his ability to do business safely in a marketplace troubled by the dangers of an urban war zone.

“Everyone around me knows that I invest heavily in this market and I receive a lot of cash,” Jama said.  “So I used to be a target of every gun wielding robber. But now, thanks to the phone money transfer I can safely transfer my cash.”

The flourishing telecommunications industry appears to be exacerbating some of Somalia’s problems, however.  Armed opposition groups have been quick to take advantage of communications technology to further their insurgency against the Transitional Federal Government of Somalia, which is backed by African Union peacekeepers.  According to reports, Somali fighters loyal to armed opposition groups are given phones loaded with credit so they can communicate while carrying out attacks.  Al-Shabaab, for example, is said to have dispatched thousands of phones to its fighters to keep the group’s communication alive.

Courtesy of Albany’s Press team in Nairobi.

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