Country Offers one of the Lowest Telephone Tariffs

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The Somalia telecommunication industry has an amazing history. From almost non-existence of private providers 15 years ago, Somalia today has one of the most vibrant telecommunication sectors in Africa. The telecommunication industry in the country has gone through major shifts over the years. Currently, the country offers one of the lowest telecommunication tariffs in Africa, a major achievement for a nation just emerging from conflict.

Making a phone call in Somalia is as low as $0.02 per minute. For Somalia to get here, it has been a long journey of innovation and resilience. Before the entry of telecommunication companies in the 1990s, individuals had to travel, sometimes for hours, to the borders with neighboring countries to make phone calls. At that time, it was only the UN sponsored peace keeping force UNISOM, that had satellite equipment for their operational communication.

“Without any reliable telephone system, life was very difficult for the ordinary Somali,” observes Abdihakim Hassan Iidow, the marketing manager at Hormuud Telecommunication Company. It is only in 1995 that the transitional government then started issuing operating licenses to the private sector, creating a buzz in the telecommunication industry. The telecommunication topography in Somalia is today characterised by multiple players offering variety of services. It is much cheaper now and easier to access any kind of telecommunication service in Mogadishu.

Hormuud, one of the leading telecommunications companies in the country, for instance offers mobile phone, landline and data services as a package, and also separately. The company has an extensive network covering South and Central Somalia: “In that area, you can get very clear mobile and landline services. We have coverage in the big towns and in remote areas,” says Lidow.

The company, which has about 4,000 individual shareholders and 5,000 employees, is one of the firms providing innovation in the sector, including a money transfer system called E-Voucher, which provides multiple benefits, including transfering money, banking and making purchases. Somalia, just like other African countries, is also adopting faster mobile internet connection service with 3G networking being available. Some players are getting ready to roll out the much faster 4G system.

“We started our 4G network trials in 2014, and the introduction of the new technology is expected to lower data use costs by about 50 per cent. People are looking for faster and more reliable systems, and we are working towards that,” says Iidow. Mobile telephony is very popular in Somalia due to ease of use and installation. For one, it does not require a lot of fixed infrastructures, an appealing prospect in a country struggling to rebuild its basic services.

Iidow says the purchasing power of the Somali population is still low, restricting the range of services that the telecommunication companies can offer. “It might be a challenge to offer high end and expensive services because of low disposable incomes,” he declares. Another interest factor in Somalia is that the local telecommunication companies do not charge transaction fees for mobile transfer, unlike providers in other countries.

Just like many other aspects of the Somalia socio-economic sectors, the face of the country’s telecommunication sector is changing. New investments in the sector, coupled with increased demand for better services, have created better services.