Interesting piece on the side effects of an 'unregulated' telecoms market.
http://news.bbc.co.uk/1/hi/world/africa/4020259.stm
Telecoms thriving in lawless Somalia
By Joseph Winter
BBC News, Mogadishu
Mobile phone masts in Mogadishu
Mobile phone masts are among the few new structures in Mogadishu
Rising from the ruins of the Mogadishu skyline are signs of one of Somalia's few success stories in the anarchy of recent years.
A host of mobile phone masts testifies to the telecommunications revolution which has taken place despite the absence of any functioning national government since 1991.
Three phone companies are engaged in fierce competition for both mobile and landline customers, while new internet cafes are being set up across the city and the entire country.
It takes just three days for a landline to be installed - compared with waiting-lists of many years in neighbouring Kenya, where there is a stable, democratic government.
And once installed, local calls are free for a monthly fee of just $10.
International calls cost 50 US cents a minute, while surfing the web is charged at 50 US cents an hour - "the cheapest rate in Africa" according to the manager of one internet cafe.
But how do you establish a phone company in a country where there is no government?
No monopoly
In some respects, it is actually easier.
There is no need to get a licence and there is no state-run monopoly which prevents new competitors being established.
Voices of Somali internet users
In pictures
And of course there is no-one to demand any taxes, which is one reason why prices are so low.
"The government post and telecoms company used to have a monopoly but after the regime was toppled, we were free to set up our own business," says Abdullahi Mohammed Hussein, products and services manager of Telcom Somalia, which was set up in 1994 when Mogadishu was still a war-zone.
"We saw a huge gap in the market, as all previous services had been destroyed. There was a massive demand."
The main airport and port were destroyed in the fighting but businessmen have built small airstrips and use natural harbours, so the phone companies are still able to import their equipment.
Despite the absence of law and order and a functional court system, bills are paid and contracts are enforced by relying on Somalia's traditional clan system, Mr Abdullahi says.
Mobile target
But in a country divided into hundreds of fiefdoms run by rival warlords, security is a major concern.
While Telcom Somalia has some 25,000 mobile customers - and a similar number have land lines - you very rarely see anyone walking along the streets of Mogadishu chatting on their phone, in case this attracts the attention of a hungry gunman.
We are very interested in paying taxes
Abdullahi Mohammed Hussein
Telcom Somalia
Life in Somalia: Have Your Say
The phone companies themselves say they are not targeted by the militiamen, even if thieves occasionally steal some of their wires.
Mahdi Mohammed Elmi has been managing the Wireless African Broadband Telecoms internet cafe in the heart of Mogadishu, surrounded by the bustling and chaotic Bakara market, for almost two years.
"I have never had a problem with security," he says and points out that they have just a single security guard at the front door.
Mr Abdullahi says the warlords realise that if they cause trouble for the phone companies, the phones will stop working again, which nobody wants.
"We need good relations with all the faction leaders. We don't interfere with them and they don't interfere with us. They want political power and we leave them alone," he says.
Selling goats on the net
While the three phone companies - Telcom, Nationlink and Hormuud - are engaged in bitter competition for phone customers, they have co-operated to set up the Global Internet Company to provide the internet infrastructure.
Manager Abdulkadir Hassan Ahmed says that within 1.5km of central Mogadishu, customers - mostly internet cafes - can enjoy service at 150Mb/second through a Long Reach Ethernet.
E-mail in Somali
Somalis send e-mails in their own language
Elsewhere, they can have a wireless connection at 11Mb/s.
He says his company is able to work anywhere in Somalia, whichever faction is in charge locally.
"Even small, remote villages are connected to the internet, as long as they have a phone line," he says.
The internet sector in Somalia has two main advantages over many of its Africa neighbours.
There is a huge diaspora around the world - between one and three million people, compared with an estimated seven million people in Somalia - who remain in contact with their friends and relatives back home.
E-mail is the cheapest way of staying in touch and many Somalis can read and write their own language, instead of relying on English or French, which restricts internet users to a smaller number of well educated people.
Just two days after it was opened, the Orbit internet cafe in south Mogadishu's km5 was already pretty busy, with people checking their e-mail accounts, a livestock exporter sending out his invoices and two nurses doing medical research.
Video calling
And Somalia's telecoms revolution is far from over.
"We are planning to introduce 3G technology, including live video calling and mobile internet, next year," says Mr Abdullahi.
But despite their success, the telecoms companies say that like the population at large, they are desperate to have a government.
Telecoms engineer
Mogadishu's phone engineers are going to be kept busy
"We are very interested in paying taxes," says Mr Abdullahi - not a sentiment which often passes the lips of a high-flying businessman.
And Mr Abdulkadir at the Global Internet Company fully agrees.
"We badly need a government," he says. "Everything starts with security - the situation across the country.
"All the infrastructure of the country has collapsed - education, health and roads. We need to send our staff abroad for any training."
Another problem for companies engaged in the global telecoms business is paying their foreign partners.
At present, they use Somalia's traditional "Hawala" money transfer companies to get money to Dubai, the Middle East's trading and financial hub.
With a government would come a central bank, which would make such transactions far easier.
Taxes would mean higher prices but Mr Abdullahi says that Somalia's previous governments have kept taxes low and hopes this will continue under the regime due to start work in the coming months.
Somalia's telecoms companies are looking forward to an even brighter future with the support of a functioning government - as long as it does not impose punitive tax rates or state control in a sector which obviously needs very little help to thrive.
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http://news.bbc.co.uk/1/hi/world/africa/4020259.stm
Telecoms thriving in lawless Somalia
By Joseph Winter
BBC News, Mogadishu
Mobile phone masts in Mogadishu
Mobile phone masts are among the few new structures in Mogadishu
Rising from the ruins of the Mogadishu skyline are signs of one of Somalia's few success stories in the anarchy of recent years.
A host of mobile phone masts testifies to the telecommunications revolution which has taken place despite the absence of any functioning national government since 1991.
Three phone companies are engaged in fierce competition for both mobile and landline customers, while new internet cafes are being set up across the city and the entire country.
It takes just three days for a landline to be installed - compared with waiting-lists of many years in neighbouring Kenya, where there is a stable, democratic government.
And once installed, local calls are free for a monthly fee of just $10.
International calls cost 50 US cents a minute, while surfing the web is charged at 50 US cents an hour - "the cheapest rate in Africa" according to the manager of one internet cafe.
But how do you establish a phone company in a country where there is no government?
No monopoly
In some respects, it is actually easier.
There is no need to get a licence and there is no state-run monopoly which prevents new competitors being established.
Voices of Somali internet users
In pictures
And of course there is no-one to demand any taxes, which is one reason why prices are so low.
"The government post and telecoms company used to have a monopoly but after the regime was toppled, we were free to set up our own business," says Abdullahi Mohammed Hussein, products and services manager of Telcom Somalia, which was set up in 1994 when Mogadishu was still a war-zone.
"We saw a huge gap in the market, as all previous services had been destroyed. There was a massive demand."
The main airport and port were destroyed in the fighting but businessmen have built small airstrips and use natural harbours, so the phone companies are still able to import their equipment.
Despite the absence of law and order and a functional court system, bills are paid and contracts are enforced by relying on Somalia's traditional clan system, Mr Abdullahi says.
Mobile target
But in a country divided into hundreds of fiefdoms run by rival warlords, security is a major concern.
While Telcom Somalia has some 25,000 mobile customers - and a similar number have land lines - you very rarely see anyone walking along the streets of Mogadishu chatting on their phone, in case this attracts the attention of a hungry gunman.
We are very interested in paying taxes
Abdullahi Mohammed Hussein
Telcom Somalia
Life in Somalia: Have Your Say
The phone companies themselves say they are not targeted by the militiamen, even if thieves occasionally steal some of their wires.
Mahdi Mohammed Elmi has been managing the Wireless African Broadband Telecoms internet cafe in the heart of Mogadishu, surrounded by the bustling and chaotic Bakara market, for almost two years.
"I have never had a problem with security," he says and points out that they have just a single security guard at the front door.
Mr Abdullahi says the warlords realise that if they cause trouble for the phone companies, the phones will stop working again, which nobody wants.
"We need good relations with all the faction leaders. We don't interfere with them and they don't interfere with us. They want political power and we leave them alone," he says.
Selling goats on the net
While the three phone companies - Telcom, Nationlink and Hormuud - are engaged in bitter competition for phone customers, they have co-operated to set up the Global Internet Company to provide the internet infrastructure.
Manager Abdulkadir Hassan Ahmed says that within 1.5km of central Mogadishu, customers - mostly internet cafes - can enjoy service at 150Mb/second through a Long Reach Ethernet.
E-mail in Somali
Somalis send e-mails in their own language
Elsewhere, they can have a wireless connection at 11Mb/s.
He says his company is able to work anywhere in Somalia, whichever faction is in charge locally.
"Even small, remote villages are connected to the internet, as long as they have a phone line," he says.
The internet sector in Somalia has two main advantages over many of its Africa neighbours.
There is a huge diaspora around the world - between one and three million people, compared with an estimated seven million people in Somalia - who remain in contact with their friends and relatives back home.
E-mail is the cheapest way of staying in touch and many Somalis can read and write their own language, instead of relying on English or French, which restricts internet users to a smaller number of well educated people.
Just two days after it was opened, the Orbit internet cafe in south Mogadishu's km5 was already pretty busy, with people checking their e-mail accounts, a livestock exporter sending out his invoices and two nurses doing medical research.
Video calling
And Somalia's telecoms revolution is far from over.
"We are planning to introduce 3G technology, including live video calling and mobile internet, next year," says Mr Abdullahi.
But despite their success, the telecoms companies say that like the population at large, they are desperate to have a government.
Telecoms engineer
Mogadishu's phone engineers are going to be kept busy
"We are very interested in paying taxes," says Mr Abdullahi - not a sentiment which often passes the lips of a high-flying businessman.
And Mr Abdulkadir at the Global Internet Company fully agrees.
"We badly need a government," he says. "Everything starts with security - the situation across the country.
"All the infrastructure of the country has collapsed - education, health and roads. We need to send our staff abroad for any training."
Another problem for companies engaged in the global telecoms business is paying their foreign partners.
At present, they use Somalia's traditional "Hawala" money transfer companies to get money to Dubai, the Middle East's trading and financial hub.
With a government would come a central bank, which would make such transactions far easier.
Taxes would mean higher prices but Mr Abdullahi says that Somalia's previous governments have kept taxes low and hopes this will continue under the regime due to start work in the coming months.
Somalia's telecoms companies are looking forward to an even brighter future with the support of a functioning government - as long as it does not impose punitive tax rates or state control in a sector which obviously needs very little help to thrive.
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]
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