Somali Telecoms Sector Must Fast-track Interconnectivity
Friday, February 08, 2013
In a talk this week at Oxford University, CEO of Dahabshiil Abdirashid Duale called for faster progress towards interconnectivity in the Somali territories' burgeoning telecoms sector. The event brought together leading researchers and practitioners to focus on the growing take-up of information and communication technologies (ICTs) among Somalis, and to discuss how innovation in those industries can nurture growth and development.
During his talk, titled "ICTs, Innovation and Regulation in the Somali Territories", Mr Duale pointed to the remarkable expansion of the Somali telecoms sector and stressed the need for further interconnection between networks.
Telecoms has been one of the Somali economy's major growth areas since the collapse of central government in 1991, with many companies emerging to fill the void left by the single state-owned provider that had previously served the market. Thanks to a combination of strong demand and light regulation the new operators thrived. Stiff competition between them has resulted in telecoms services that are among the cheapest and most reliable in the region.
Dahabshiil, the Somali territories' largest private employer and one of Africa's leading remittance businesses, entered the telecoms sector with the acquisition of Somtel: a dynamic, fast-growing firm specialising in advanced mobile technology. The move was representative of a broad regional trend of money transfer companies - alert to the synergies between the two industries - becoming increasingly involved in mobile.
As the number of providers grew, so too did the need for an interconnectivity agreement between them. Calls between networks were impossible and it was common for a Somali mobile user to have four or five different SIM cards. In a government-brokered deal, a handful of companies began to open their networks up to competitors' customers, beginning a process of integration that has made it easier for Somalis to keep in touch.
Commenting on the need to build on this progress, Mr Duale said: "While important steps have been taken there is still much to do to tie the sector together for the benefit of consumers.
"The wider rewards are there for the taking. There are more than two million mobile subscriptions in the Somali territories and ordinary people are now enjoying the advantages of being connected with each other and with the outside world."
"The spread of telecoms has been hugely empowering: enabling businesspeople, investors and aid workers to do more with existing resources. From traders checking market prices to doctors giving remote consultation, the penetration of mobile and internet services has had an extremely positive impact on Somali life."
The manner of the Somali telecoms boom is in many ways characteristic of the way the territories have lived on their wits for the last 22 years. Innovative, freewheeling commerce has flourished in the absence of regulation - fuelling development and raising living standards. Livestock, money transfer, energy and construction have all seen astonishing growth thanks in part to inflows of financial and human capital from the diaspora. As the political and security situation in Mogadishu continues to improve, tech-savvy entrepreneurs are returning - bringing their skills and knowledge with them.
Mr Duale concluded: "It is this entrepreneurial flair that has sustained the Somali people through many challenges.
"Good governance is needed for us to reach the next phase of economic maturity, and the need for agreement on mobile networks is a clear example of where regulation and regulators have a role to play. But in the interests of retaining that innovative, pioneering spirit it is vital that we refrain from overregulation.
"It is my hope that as the region continues to stabilise, the way will be open for a policy environment that complements rather than stifles business growth, and harnesses it for the benefit of ordinary Somalis."