LIRNEasia » Somalia

Somalia calling

Abu Saeed Khan — Wed, 12 May 2010 01:31:18 +0000

Amid rapid technological development, the competition to supply telecom services in war-torn Somalia proves that some complex businesses can thrive even in one of Africa’s dangerous markets. One of the largest telecom companies in Somalia, Hormuud Telecom, has annual sales of as much as US$40 million. Even “Mobile 2.0″ is making inroads here. But the success of Somalia’s telecom sector shouldn’t come as such a surprise, according to experts. Telecom companies have also stepped in to provide missing infrastructure in countries such as Afghanistan and the Democratic Republic of Congo.

Svet Tintchev, World Bank expert on the telecom industry in developing countries, says, “The first ones who put in electricity generators in rural areas are the telecom operators … in a way, their leverage goes beyond pure telecom service.” Tintchev calls the local telecom companies “the economic enablers in Somalia”. Four main telecom companies now operate in Somalia and, despite competing for customers, they have cooperated with each other to maintain their networks and set prices to ensure that competition doesn’t become too cutthroat. Horseed Media writes quoting Wall Street Journal.

The bounty of sensible regulation in Africa and Middle East

Abu Saeed Khan — Tue, 01 Aug 2006 08:56:16 +0000

Arab Mobile Phone Subscriptions Jump 70% in 2005
Source: www.cellular-news.com/story/18589.php
The number of mobile phone subscriptions in the Arab world has grown by a whopping 70 percent in 2005, underlining a strong consumer demand coupled by increased liberalization and competition in Arab telecom markets, according to a recently published Madar Research study. The study also reveals that Bahrain and the United Arab Emirates have achieved mobile phone penetration levels among their population that are comparable with those prevalent in Europe and Pacific Rim countries.
Mobile subscription in the Arab world – total of 18 countries covered by Madar Research excluding Somalia, Mauritania, Djibouti and Comoros – grew from 51.19 million by end 2004 to 87.06 million by end 2005, exceeding all expectation and forecasts.
This resulted in an average pan-Arab penetration rate equivalent to 28 subscriptions per 100 of population, ranging in individual countries from a low of just over five percent penetration to a high that exceeds 100 percent.
“Thanks to a telecom liberalization drive which gained momentum in many Arab countries over the past couple of years and the resulting competitive environment and dropping prices, mobile telephony has become accessible to a wider base of Arab consumers,” said Abdul Kader Kamli, president and research director of the Dubai Media City-based Madar Research. “Due to falling fees and rates – not to mention the mobility advantage – mobile phones have interestingly become a more viable alternative in many Arab countries where fixed telephone service is either unreliable or unable to meet demand. In such countries the subscription ratio of mobile lines to fixed lines can now reach a high of 10 to one as is the case in Morocco, which is by far higher than the ratio in the industrialized world,” Kamli added.
Madar Research expects mobile growth to sustain strong levels, especially in countries where penetration rates are still low.
Classification of Arab countries by regions shows that the highest growth rate in mobile subscription was recorded in the least information and communication technology-savvy countries of Yemen and Sudan, while the lowest growth was seen in the more mature markets of the Gulf Cooperation Council (GCC) region. The GCC witnessed growth of around 38 percent, while North Africa (excluding Egypt) made almost 86 percent, followed by nearly 83 percent in the Levant, which groups Lebanon, Syria, Iraq, Jordan, Palestine and Egypt. In terms of penetration rates the GCC leads by far the Arab world, followed by North Africa and the Levant, respectively.
Among other findings of the study are Libya’s remarkable three-digit growth in mobile subscription – the highest in the Arab world in 2005, Jordan’s rise to become the most competitive mobile telecom market among the countries covered by the study, and Bahrain’s ascendance to the list of world’s top countries in mobile penetration.

Randy and Michael Spence

Indi Samarajiva — Sun, 19 Sep 2004 17:28:08 +0000

Dr. Randy Spence spoke of his experiences in Somalia, where there isn’t much government to speak of. But people are using ICTs.

However, he emphasized that ICTs must drop in cost for the investments of the 1990s to bear fruit. “I’m involved in nanotech and biotech, and fairly rapid diffusion of this technology will be very important.”

Although mobile and wireless access are expanding, fixed line and Internet access lag – and the differences are largely due to regulation.

The future may be wireless broadband, but for the foreseable future the policy is fixed line.

Dr. Michael Spence

Dr. Spence began by telling his economic perspective on the importance of good governance. “There’s a lot of talk about how all you need is a market system and that’s just nonsense. Anyone who’s studied information flows in an economy knows that good governance is the foundation of the market system. As an example, a country that doesn’t have a central bank that can control interest rates, etc is a country that’s in trouble. Everyone knows the consequences of a weak central bank, what we need to do is let people know that there are consequences to having instability in the ICT sector.

On What’s Important

On data: A reasonably accurate portrait of the portrait of the state in these dimensions is useful. If you look at the Chinese data, you can debate if the growth is exaggerated, but the data is there and it’s clear.

Foriegn Investment: Creating appropriate conditions for. Competition is the best way since it assures that pricing is appropriate.

Internet: I would not like to see the Internet set aside in favor of ‘plumbing’. I would like to see LIRNEasia get Internet and the www talked about and worked on. I didn’t realize this until I was in Cambodia at an cafe, and then’s when I realized that the Internet wasn’t ‘real’ at that speed. The right answer seems to be high speed connections to hubs where the Internet is real.

We do this in part to reduce volatility and encourage investment. We need to do stuff that is unpopular. The regulator also serves as someone the politicians can point to and say ‘it’s not my fault’.

Finally, let me just say that the network based information technology we’re now seeing develop is in economic terms lowering transaction costs all over the place

1. Creating millions of market
2. Decreasing geographic boundries
3. Intergrating growing markets
4. Increasing value of human capital (making more accessible)
5. Changing relative prices and growth dynamics.

It’s absolutely crucial that we not end up in a situation where those powerful forces are at play in one part of the world and not the other.

It’s impossible to not get discouraged about success, but there’s no other way to do it. (This is said with a smile. It was encouraging)