SOMALIA AND CONGO: SOMALI TELECOM - REACHING THE PARTS OTHERS CANNOT REACH

31 May 2002

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Somali Telecom’s Ed Resor has an interesting story to tell. He helped the Eritreans get international connectivity at the end of the war with Ethiopia and created similar telecomms links for Somalia. He’s also recently invested in the Congo (DRC). It sounds like he always invests in former war zones but he assured us in this interview in New York that he’s looking for places where people think it can’t be done because they are either too small or too difficult.

 

How did it all start?

 

I finished with Save the Children in Sudan in 1990 and I moved back to New York. I was looking for things to do in Africa. I went over to Eritrea for a conference, weeks after the liberation of Asmara. I met with their telecoms people and promised I’d help them once the war was over. I helped them get an international telecoms link for the first anniversary of the liberation.

 

Then I saw some of my friends from Sudan who were working in Mogadishu. They said the only thing that would help would be to jam the warlords communications. I then spoke to UNDP who said they would like to do what was done in Eritrea...To cut a long story short, I ended up going into partnership with Abdi Rizak Ibrahim Osman (a former Engineering graduate from Morgan State University).

 

What was it like back then?

 

I took a trip to Somalia and found people paying US$18 per hour for an Inmarsat call. We put in a 3.8 m digital earth station of the type used for private networks by oil companies. I then connected using a Russian Satellite Corp satellite. We started in Bossasso on the tip of the Horn of Africa and then went to Hargeza, capital of Somaliland. We now cover from the Kenyan border all the way up to Hargeza, pretty much the whole country.

 

How did you connect across the country?

 

Initially we worked with earth stations and overhead copper lines. We looked for a long time at cellular but didn’t get involved until Interwave came out with their base stations. In this respect, we lagged behind Barakat, our main competitor. It’s now been broken down into three independent companies.

 

Who are your main competitors?

 

Aerolite/Olympic who work with Telenor and Samtel who work with KPN.

 

How many customers have you got?

 

Around 30,000. We have 40% of the market, so the total market is around 75,000.

 

Is it still growing?

 

Yes. It’s growing by about 20% a year. It’ll grow even faster if we start aggressively marketing pre-paid cellular.

 

You also operate in the Congo (DRC)?

 

Yes, through Globalnet who we helped out of bankruptcy. They have operations in Goma and Kisangani, the RCD-controlled area. We’ll be expanding to Bukavu but we’re in start-up mode at the moment. The main competitor is Rwanda Tel through a joint venture that is partly owned by MTN.

 

Do you also offer internet access?

 

In Somalia we offer 56K dial-up access in Bossasso, Hargeza and Mogadishu. But overall the subscriber base is probably in the hundreds. In Congo we have an internet cafe in Kisangani but we’ve built a digital microwave network and therefore we’ll be able to roll it out across the country.

 

You seem to operate in former war zones?

 

No, we operate where there are political situations that mean we can get good technology to the common people.

 

What are your expansion plans?

 

The key thing we do in Somalia is that we encourage resellers and phone sellers (as happens in Senegal), even people with short-wave radio. The Somalis came up with the idea. An HF radio operator can play us against the competition and get the best deal.

 

I said to the ITU, if you surveyed Somali families, you’d find that 85% of them had used a phone in the last 6 months. I can walk into a cyber cafe or telecentre and call anywhere in the world for 30 cents a minute. There’s a price war in Mogadishu! The big issue for telecoms in Africa is this price war. It will force operators to go to the unserved areas because the competition would not be so fierce, if the regulators would let us do it. We want to get out to the rural areas and cover the whole country.

 

We’re looking for partners and opportunities in similar African countries with populations of 50 million people or less. We want to focus on access - places where people think it can’t be done because it’s too small or too difficult.

 

We have two of the eight rural licences in Kenya but we can’t get the investors so it’s not going forward. We tried to do a similar deal in Haiti but with national coverage but failed to get the licence.

 

Initially I got into the voice business to pay for the infrastructure for data. That’s working but we’ve been slow on the internet. Now the internet may start to lead. I’ve been talking to the people at Afsat. I think we can expect to see more investments along those lines.

 

In time we’d like to offer a switching hub for intra-African traffic so that we could offer connectivity from Djibouti to Kenya.

 

What about Africa One?

 

Africa does not need Africa One. It’s a waste of money.

 

INDEX

 

 

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