Telecoms enjoy boom in Somalia

Abdullahi Hussein, executive manager of Telecom Somalia, said the deal presented benefits for companies and subscribers, but he admitted they had marginalised the smaller players.

“In a way it seems we had agreed to have control of the market but our intention was to ease the burden on our poor customers,” he said, adding they could now afford cross-network calls.

The deal forced firms such as Somafone to change tack to survive.

It now offers the lowest international calling rates of 0.30 US cents per minute compared to 0.50 US cents for the three big firms — making it a popular choice for many Somalis who depend on remittances from relatives abroad.

Somali telecom operators use the US dollar and other regional currencies in their operations to avoid problems associated with an extremely weak Somali shilling.

“We prefer dollar and other regional currencies since the country has no central bank that circulates the shilling,” Ahmed Galool, public relations director of Salaam Somali bank, which partners with Hormuud Telecom, told Reuters.

Lawless state

A hundred dollars is equivalent to three million Somali shillings, which apart from being heavy to carry, exposes money traders to the risk of robbery in the lawless state.

The telecoms sector employs more than 6,000 Somalis and a few foreign engineers, mainly from Asian countries.

Officials said the companies try and stay out of the country’s 18-year-old conflict, which involves complex tribal and ideological differences.