However despite the anarchy which continues to disrupt the country, the telecoms market, dominated by the competitive mobile sector where several operators compete for customers, has flourished.
Mobile telecommunications have had a positive impact on the economy of Somalia, despite the lack of regulation. Private and unlicensed mobile companies using satellites for international communications have emerged to serve the high demand for communications. Fixed lines and mobile phones are being offered by many telecommunication operators such as: Golis Telecom Somalia, Hormuud, NationLink Telecom, Somali Telecom Group, Galkom, Global Internet Company, Telcom, Netco, Somafone, Telcom Puntland, and Telenet International. Starting in 2012, many mobile operators began launching 3G services in Somaliland and soon expanded to other regions. A number of telecommunication operators are offering LTE services in the region, including Somtel International and Telesom, both of which are based in Somaliland, while Globalsom and Sahal Telecom have launched time division duplex LTE (TD-LTE) networks in Mogadishu. In 2015, global satellite service provider O3b Networks signed satellite connectivity contracts with three Somalia telecommunication operators.
Hormuud Telecom is Somalia's largest operator with over 4 million subscribers. They recently announced ambitious plans to increase their 4G telecom coverage to 100% by 2023.
Currently 4G access is primarily limited to major cities, and Somalis in rural areas often do not enjoy the same level of network access. As such, 30% of Hormuud’s 3.6 million customers still rely on its 2G network - the majority of which live in rural areas.
Hormuud began expanding its 4G network capacity in 2015 in partnership with the Somalia ministry of telecommunications, which estimates that across the country, over 11.25 million Somalis, some 70 percent of Somalia’s 15 million population, now have access to 4G internet.
Their expansion of the 4G network access across the country, will give millions of rural Somalis, who still rely on 2G, access to fast internet for the first time.
Hormuud’s aim for total 4G expansion in two years is in line with current government commitments: the government’s National ICT Policy pledges to reach total 4G coverage between 2024 and 2025.
Extending 4G also aims to support Somalia's goal of becoming a cashless economy. Mobile money plays a critical role in the Somali economy, with two-thirds of all payments made on mobile money platforms.
With a national 4G coverage, Hormuud Telecom is not only targeting better access to the digital world for Somali populations but also reserves a larger subscriber base that will generate new financial revenues in a market it competes with Golis Telecom, Telesom, SomNet, Somtel, SomLink, and Nationlink.
Extending #4G to the four corners of the country is essential to building a thriving and prosperous Somalia. @HormuudCEO shares Hormuud’s pledge to provide 100% 4G coverage to all Somalis. Please read more here:
— Hormuud Telecom (@Hormuud) July 31, 2021
👇https://t.co/wNrhBTwl4Z
It may come as a surprise, but the cheapest data prices in Africa are in Somalia, which falls into the top ten countries with the cheapest rates globally. This is according to a 2020 study from Cable.co.uk which ranked Somalia as the seventh cheapest globally with 1GB of data costing on average just $0.50.
The amazing thing is the massive jump that Somalia made from the 2019 report where it ranked 133rd with an average price of $6.19 per 1GB.
Also considering the strong culture of using mobile money. A 2018 World Bank report found that almost three-quarters of the Somali population aged 16 and older use mobile money.
In urban areas, mobile money penetration is at around 83% and at about 72% in camps for internally displaced people. Even in rural areas, 55% of the population uses mobile money and it has "become an essential and widespread part of Somalia's economic eco-system" the World Bank said.
Therefore Hormuud Telecom also plan to expand its mobile money financial services to reach all of the Somali population. Hormuud's CEO, Ahmed Mohamud Yuusuf, said that the low data prices are a testimony to the huge strides that the country has taken to increase its digital infrastructure.
"The next step in our journey is to reach 100% mobile money penetration. We know that mobile money is vital to Somalia's post-COVID development, allowing urban and rural communities to flourish, empowering the most vulnerable and widening financial inclusion. More recently we've also seen how incredibly important access to telecoms and Internet has been to public health during the COVID-19 outbreak."
Mobile money is popular in the country where over 95% of the local currency – the Somali Shilling – is believed to be counterfeit. For a country long affected by civil war and unrest, mobile solutions have provided the foundations for business and trade to once again emerge in the country.
Very recently the National Communications Authority (NCA) of Somalia has issued a warning that they will have to conform with the country’s unified licensing framework which complies with national communication law. All mobile operators and telecoms companies in Somalia have until the end of August 2021 to apply for licences to operate, or they will have to cease.
According to the NCA, applications for national communications infrastructure providers carry an initial fee of US$5,000. Licensees then need to pay an initial operating fee of $275,000 and an annual fee of $50,000.
In order to qualify, organisations should be registered in Somalia and have a fully registered office and permanent premises in Somalia. They also need to “provide details of shareholders and directors” and “provide evidence of tax compliance”, said the regulator.
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