Business
Somalia: Nation gradually rises from the ashes, opportunities abound in telecommunications sector
There are several mobile money services, the most popular of which seems to be Telesom’s Zaad service. This was banned by the al-Qaeda-linked al-Shabaab Islamist group when it controlled Mogadishu but is now functioning again. In the absence of a banking sector, these services are vital for transferring money into the country from the diaspora and around the country.
Somalia’s transitional Federal Government – which was been replaced by the current administration, set up a Ministry of Information, Posts and Telecommunications and it adopted the 2012 Telecommunications Act, which is in the process of the setting up of a regulator to be called the National Communications Commission. Once this gets off the ground it will be a converged regulator dealing with both media and telecommunications.
However, the reality is that the new administration has bigger concerns than trying to get this kind of legislation implemented and the operators have campaigned vigorously against it. From their perspective, more regulatory control and taxes are not a happy prospect and it’s fair to say that there’s a connection between high levels of competition, the absence of taxes and low user prices. Nevertheless, for a state to function it needs revenues and the telecommunications operators are the most successful businesses in all parts of the country.
The telecommunications sector is vital to the recovery of Somalia. International call income is the second largest source of revenue after diaspora remittances, however, due to the absence of regulation, none of that revenue benefits the government.
Somaliland is currently connected to international fiber via Djibouti, however, Mogadishu does not yet have such a connection – all international communication to Mogadishu is via satellite – a very expensive. alternative.
The new administration in Somalia and implementing partners are in the process of working to bring international bandwidth to the capital. They want to set up a series of video/Skype rooms in government ministries, departments and leading agencies so that the government can communicate effectively with the outside world.
One of the returning diaspora Somalis is entrepreneur Omar Osman who recently founded the Internet Service Provider (ISP) Somalia Wireless, that has around 100 subscribers including UN agencies, hotels and private residences. The company intends to create a “Super Wi-Fi” network using TV White Spaces spectrum.
