mobile phones in Somalia

[somaag]

Hello,

 

I'm studying the mobile phone economy and would like to know about services in Somalia. I have heard somewhat contradictory things about the quality and affordability of services, but overall it sounds like a remarkable case of growth considering the political environment. I was wondering what the reaction was among people who have phones? Are they in fact cheap and reliable? What kinds of challenges and opportunities do you think are specific to telecommunications work in Somalia or more specific markets (e.g. Mogadisho, Kismayo, Hargeisa, rural areas, etc.)? Is the service any different from other places (Africa or elsewhere) in technology or terms of service? Where does the equipment come from? Do people need any special training to set up operations? Is it profitable?

Do you know anyone who worked in this industry directly that might be willing to talk about it? Unfortunately, I am not yet a Somali speaker and do not think I will travel there until I am.

 

Thanks for your help!

[Allamagan]

Somaag,

mobile phone businesses in Somalia proved to be very lucrative for the small and growing telcom companies. There are lots of them operating in Somalia, north Somalia and south Somalia. They do offer cheap and affordable packages.

 

I think Gordon, a brother who goes here by the name Gordon Gekko or "The Economist" will help you a lot if he is around here. I know that he knows a lot.

[Miskiin-Macruuf-Aqiyaar]

It seems, and I hope I am wrong on here, you are someone who wants to set-up a telecommunication company in Soomaaliya. If you are thinking like that, then forget it.

 

Otherwise, if you are genuine about this research about Soomaali telecommunicational companies, here are a few answers.

 

You've asked too many questions, however about the question if the phone's bills are cheap and reliable and what the customers think of it -- yes, it is cheap and reliable than it was pre-war. It is also more pravalent and wide-spread as well. Even the villages have phones lines now. Those with cell phone accounts can roam nationwide.

 

People pay a pre-set monthly bills [mostly $10], which gets you free local cals and sometimes immediate surrounding regions [provinces] where one lives. The downside until few years ago was that a customer from one phone company could not call another friend who had a contract with another phone company, even if they were neighbours. So those who could afford it had two or three phone lines with three different companies at home. It had now changed.

 

The telecommunication equipment is usually imported from Dubai or Nairobi, Kenya; some as far as Thailand, China or South Korea, via Dubai.

 

The service is particularly different from other countries in the region, for one thing, it is easier to have a new line, where a company would install within a day or two, unlike, say, Kenya or Itoobiya, which would take weeks or even months and where bureaucracy and red tape need bribes. These are not that necessarily in Soomaaliya. It is also a lot of cheaper and local calls are free. Long distance calls also are much more cheaper than most of Afrika.

 

About your question about the employees' special trainings. Each company, of course, has a few ingineers and who in turn train some of the new employees for the basics. I had an engineer brother who used to work for one of the largest telecommunication sector before he left the country a few years ago, so if you have any other specific questions, I will ask him for you.

[Buuxo]

I also here you get killed if you have a mobile phone.The phone is more expensive than any human life.Tararki baa dhaamay, why bother with increasing the number of mobile phone businesses,when people don't even have proper sanitation,drinking water and basic healthcare.

[Jacaylbaro]

I can get some information for you about Somaliland if you want.

[N.O.R.F]

^^SL needs more phone masts saxib. Its takes along time to get though to someone LoL

[Jacaylbaro]

They fixed it now .... it is one-touch nowadays but don't know how long

[N.O.R.F]

^^Really? Waar maaha maaha,,,,

[Jacaylbaro]

Yeah ,,, i'm wondering how da hell did they make it runtii

[N.O.R.F]

Well done to them. The amount of time I spent trying to call people was just crazy,,,,

[Jacaylbaro]

Yeah , and they were loosing money too coz how many calls haven't been made ...

[Gordon Gekko]

The current state of the telecom industry on the Somali territories can be closely described as an oligopoly as the number of players are few and wealthy (dividends from the major telecom outlets has been very good for the last couple of yrs). I also believe, although I wont disclose why, that their all using almost the same suppliers and they seem to be on very long contracts with these suppliers - a trait that further characterizes the nature of oligopolic market.

 

Thats why you dont see the somali telecom companies using cheaper and more efficient technologies to offer more competitive services. Instead, their all pretty much the same and compete by price only.

 

Unlike MMA I do believe one can succeed with a new telecom venture in these markets, especially in SL and in new areas that hasnt matured yet such as internet services and VoIP. However, you will have a very hard time beating the household residential telecom carriers such as Telesom. This company is by the way registered in the UK so if you want more in-depth financial info on it, buy a report from the Companies House. Think it costs £1 or something.

 

I believe there will be consolidations in this market in the coming 5-10 yrs and the number of players will be further decimated to a couple of revenue monsters who will eventually morph into diversified conglomerates like the good ol' Al-Barakaat.

[somaag]

Thanks, this is great information. I was aware that I might be asking too many questions, but figured people could answer whichever ones they wanted to. I don't plan on doing any investment. I'm writing a student thesis on this topic. I've heard people say the system is cheap and reliable, but somehow inefficient, but haven't seen much written on the topic.

Nuruddin Farah's book, Links makes periodic references:

 

"There is a one-man telephone company I can call for..."

Jeebleh remembered that until the late eighties it had been impossible to call Somalia from anywhere because the country boasted the worst telephone network on the entire continent. You just couldn't get through to anyone living here. So how it was possible in civil war Mogadiscio for a one-man telephone company to allow him to speak to his wife?...

 

A man came to Jeebleh's room with a briefcase full of gadgets, including a telephone linked to a satellite long-distance service.

 

Later he writes:

Three of the telephones on Bile's desk started ringing simultaneously, though not in any coordinated manner, because the phone companies were owned by subsidiaries of companies based in the United States, Norway, and Malaysia, and the tones they used were different.

 

Does this sound accurate? I imagine it must be a little dated, as there has probably been consolidation since then, but I was a bit confused trying to figure out how the companies are organized, since they rely on foreign service providers, but none of the foreign companies actually have offices in Somalia. This must be quite unique. Are these foreign companies the suppliers you're talking about, Gordon? Or do you mean equipment suppliers ?

 

Also, I've heard people complain about the lack of interconnection. You say this has been fixed, Miskiin? Does anyone know how they worked that out?

 

Thanks so much for your help, guys!