Six Somali operators activate interconnection

Six licensed telecom operators in Somalia have completed interconnection in the country, marking a significant milestone for the East African nation's telecom industry. Interconnection is the linking of telecommunications networks so that customers of one network can communicate with customers of another network.

The country's National Communications Authority (NCA) made the announcement saying the interconnection will enable seamless connectivity between the operators and provide millions of customers with more options and competitive pricing.

The original interconnection agreement was signed in December 2022, and came into force on January 10, 2023. Since then operators have been implementing the interconnection process. The NCA said at that time that the operators involved were Hormuud Telecom, Somtel, Amtel, SomLink, Golis Telecommunications and Telesom.

The official launch event in capital Mogadishu this week highlighted the importance of interconnection in promoting competition, improving connectivity and driving innovation in the industry.

The NCA said the interconnection will allow for the exchange of voice traffic between the six operators, enhancing the quality of service for customers and expanding the network coverage. It will also promote healthy competition among the operators, leading to better pricing and service offerings for consumers.

"The successful interconnection among the six operators is a significant achievement for the telecom industry in Somalia. Therefore, this will promote competition, reduce prices, and provide more options for customers. We applaud the operators' efforts in completing this important milestone and encourage them to continue collaborating to benefit the industry and consumers," said NCA General Manager Mustafa Yasin.

Yasin highlighted that previous interconnection agreements had failed – in 2000 and 2014 – mainly because of a lack of regulatory framework.

"We hope this time round it will be successful because we have the tools, such as a communications law that mandates interconnection, regulations, guidelines, and regulatory authority that has the oversight mandate," he added, thanking the World Bank and IFC for technical support.

The NCA believes interconnection will promote healthy competition among the operators, leading to better pricing and service offerings for consumers. (Source: Image by wirestock on Freepik)

"The successful interconnection among the six operators is a crucial step towards promoting connectivity and innovation in the telecom industry. We encourage the operators to continue working together to provide the best possible services for our citizens and contribute to the growth of the country's economy," added Somalia's Minister of Communications and Technology, Jama Khalif.

Somali Prime Minister, Hamza Barre, also attended the launch ceremony and reiterated that the successful interconnection was a significant milestone in the nation's efforts to enhance connectivity and promote competition in the telecom sector. He encouraged operators to continue collaborating for the benefit of citizens.

Somali telecoms sector

Somalia is a unique market in Africa, with a much less mature telecom industry than other countries.

In November 2022, the NCA issued the country's first spectrum license to Hormuud Telecom. Up until that point the country's mobile operators had been using spectrum for many years to run their networks with no formal licensing regime.

According to statistics from DataReportal's 2023 digital report on Somalia Internet penetration in the country was just 9.8% at the start of 2023, with about 16.1 million people in Somalia not using the Internet yet.

Data from GSMA Intelligence shows, however, that there were 7.99 million cellular mobile connections in Somalia at the start of 2023, equivalent to about 44.7% of the total population.

The researchers, however, did note that many people make use of more than one mobile connection – for example, they might have one connection for personal use, and another one for work – so it's not unusual for mobile connection figures to significantly exceed figures for total population.

The number of mobile connections in Somalia increased by 5.4% between 2022 and 2023.

According to statistics from market research company Omdia, Somalia has nine mobile operators, but only six signed the interconnection agreement.

Omdia ranks Hormuud Telecom as the country's biggest operator with almost 40% market share at the end of 2022. The second biggest is Nationlink Somalia with 16% market share followed by Telcom with 14% market share. The remaining six operators each have market shares of between 9% and under 1%.

Omdia stats show that by the end of 2022 over 93% of mobile traffic in Somalia was still on 2G, with 6.9% on 3G and under 0.06% on 4G.

The Central Bank of Somalia also issued the country's first mobile money license to Hormuud Telecom in March 2021.

DataReportal said that 37.1% of people in Somalia, aged 15 and over, had a mobile money account in early 2023, and 35.1% made a digital payment in the last year, while just 2.4% had a debit card.

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*Top image source: Image by ArtPhoto_studio on Freepik.

— Paula Gilbert, Editor, Connecting Africa