30 July 2014

Somalia: Somali Telecom Companies Agree to Link Services

Mogadishu — Mobile phone customers in southern Somalia will no longer have the burden of switching between multiple SIM cards to call customers on Hormuud Telecom, NationLink and Somtel networks.

Thanks to an agreement reached by the three companies earlier this month, customers of all three companies will be able to call each other using any SIM card.

Hormuud executive Abdulkadir Hassan Ahmed, who spoke to the media about the negotiations on behalf of the three companies, said the agreement was an indication of the progress made in Somalia's telecommunications sector.

"It was agreed that telephone lines would be opened among the companies of Hormuud, NationLink and Somtel on July 22nd, and that was implemented on the same day the agreement was signed," Ahmed told Sabahi.

Previously, a lack of understanding among the leadership of the three companies and concerns about the effect on their competitiveness in the market prevented them from opening the lines, he said.

Somali Ministry of Posts and Telecommunications Deputy Minister Ahmed Ali Salad Tako said the government had been involved in discussions with each company on how to open up Somalia's mobile networks and was pleased with the final outcome of the agreement.

"From now on the people who live in southern Somalia will no longer be required to carry several telephone [cards]. A person will only need one SIM card and be able to call the customers of the other companies," Tako told Sabahi.

Consumers welcome agreement despite unclear rates:

In Somalia's unregulated telecommunication market, rates are not clearly disclosed to customers, with users mostly left to estimate how many minutes a $1 charge will give them based on their own previous usage.

It is not clear if consumer rates for same-carrier calls will be affected by this agreement, but the cost of placing calls to and from different carriers has been observed as more than double same-carrier rates, and for some as much as five times as much.

"The companies did not tell us how much it will cost to call a mobile from another carrier," said Hassan Nur, a Mogadishu resident Sabahi met at an internet café. "But I did a test using a Hormuud SIM card and when I called a NationLink mobile user I was charged $0.25 whereas when I called a Hormuud user it was only $0.05."

Despite the confusion about the rates, Somalis who depend on mobile phones to run their businesses or just to communicate with friends and relatives welcomed the agreement.

Suldan Ali Hassan, a 54-year-old elder who lives in Mogadishu, said he was happy when he heard about the agreement and that it was a step in the right direction.

"The opening of the network lines by these companies will save us money now that one SIM card from any of these companies is enough for a person, and I am thankful to the officials who implemented this," he told Sabahi.

Hassan said the companies have looked beyond their own interests and presented a programme that is very beneficial to the customers using their services.

Abdirahman Ibrahim Nune, a 25-year-old living in Mogadishu, told Sabahi the agreement lifts a great financial burden felt by all mobile users.

"It was difficult for me to communicate with my friends who had service from another company aside from the one I subscribe to, but now thanks to God I can call anyone using only one SIM card," he said.

Zaynab Abdullahi, a 30-year-old who owns a general store in Wadajir district, said the ability to reach all her customers using only one SIM card will make conducting business much easier.

"I had three telephones that were Hormuud, Somtel and NationLink so that I could communicate with my customers that use other companies, and it was a difficult thing for one person to carry three phones," she told Sabahi.

But more than customers, Hormuud stands to benefit the most from the agreement as it already dominates the Somali mobile market, according to Yasin Hassan, 42, a professor of communication at Plasma University in Mogadishu.

"Since people will not have to carry several [SIM] cards, they will end up keeping the Hormuud [SIM card] because that is what most people in southern Somalia use," he said, adding that the agreement could lead to less competition and savings for users in the long-term.

However, Ibrahim Jeylani, a 32-year-old staffer at Villa Somalia, said he plans to use NationLink as his provider because the company has better rates for both pay-as-you-go and monthly plans.

"Another reason is also the fact that my friends also mostly use NationLink," he added.

Sales of mobile devices will likely not be affected by the agreement, said Ahmaday Hussen, 27, who runs an electronics shop on Maka al-Mukarama street.

"There might be an impact, but nothing drastic," he told Sabahi.

"Very few people buy two phones, and those [who do] are the people who have money and use smartphones. Those sales might go down," he said, adding that these individuals represent only a minute part of the customer base.

It is not clear if interconnectivity between the carriers will also apply to mobile users in Puntland, where Golis Telecom Somalia, a Hormuud partner, and Nationlink operate.

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