Telecoms Flourish In Strife-Torn Somalia
Published on: 15th April 2008
APA-Mogadishu (Somalia) Telecommunications is one of the rare business successes in strife-torn Somalia, with three major phone companies. The major companies are Hormuud, Nationlink and Telecom, which compete in the field of mobile and landline phones.
Two new phone companies providing mobile telephony, Somfone and Awale, have recently been introduced and are providing the established companies with stiff competition by offering lower charges for international calls.
"We charge only 50 US cents for international calls per minute and local calls are free for a monthly fee of just $10 only" Yasin Sharif Hassan, a manager for Hormuud told APA.
In Somalia it takes only a couple of days for a landline company and only hours for a mobile service to be launched, whereas it takes several months if not years in neighbouring countries.
It is easier to set up a telecommunications business in Somali because there is no need to get a license and there is no state-run monopoly which hinders new competitors from entering the market.
Additionally, there are no taxes and hence the low charges.
"Telecoms and post services were a monopoly managed by the government before the civil war, but after the regime was toppled, everybody who has money can take part in such businesses," Lutfi Sheriff Mohammed, an economist, told APA.
"There is massive demand for telecoms services because of the large numbers of Somalis in the diaspora who still have families and relatives living in Somalia," he added.
Since there is no reliable law and order and a functional court system, bills are paid and contracts are enforced by relying on the traditional clan based system.
Somalia's telecommunication companies are looking forward to even a brighter future with the support of a functioning government.