A storm is brewing among mobile telephone operators in Somaliland after the Ministry of Posts and Telecommunications entered into a deal with an American firm to install a gateway system.

The business community is opposed to a move by the government to have them interconnect through a gateway system that has been installed at the Ministry of Telecommunications in the capital, Hargeisa.

A US-based company, Transcom Digital Inc (TDI), registered in Virginia as a global or limited resale service, is behind the installation of the controversial gateway system.

According to records seen by to The Standard in Hargeisa, under the five-year agreement signed with TDI, the Somaliland government will receive capacity-building assistance that includes technical skills and management training.

The central exchange system that is a complete package of hardware, software services and solutions, has been provided at a cost of US$3 million including costs of staff training and management support of the Telecommunication ministry.

Under the arrangement, TDI will recoup its capital investment from accruing profits. Technically, the deal allows TDI to become the sole international provider of telecommunication traffic, a highly lucrative business.

But the deal with the American firm has elicited sharp reactions from phone operators who have dismissed it as a disguised attempt to undermine telecom business owned by Somaliland nationals.

They have even questioned the credibility of TDI to be trusted and asked why the concerned ministry did not invite bids from other interested parties.

However, the Telcoms minister, Hassan Khayre, dismissed the claims.

"In the last eight years we have been asking local operators to interconnect but they have refused. In any case we couldn't invited bidders since we did not have the required money in the first place," he said.

Khayre said the quality of telecom services would substantially improve, as congestion will be resolved through interconnection link in the gateway system. He also predicted a large expansion to rural Somaliland.

"With the lack of inter-connectivity, it is expensive for locals to engage in telecom business, but once the gateway becomes operational, you won't need a huge start-up capital for renting satellite service, setting up towers, etc as all these will be provided by the gateway."

The East African Standard