War And Business? The Telecom Case In Somalia

Despite the violence, a serious humanitarian crisis and an over 20 year conflict devastating the country, Somalia remains a thriving market for some businesses, reveals the Wall Street Journal in an article entitled “Telecom Firms Thrive in Somalia despite War, Shattered Economy”.

The article stresses that despite “the absence of any government-regulated phone or Internet access”… “the competition to supply phone service has stoked the nascent revival of Somalia’s shattered economy, and it shows that some complex businesses can thrive even in one of Africa’s least developed markets”.

“The success of Somalia’s telecom sector isn’t all that unusual for a war-shattered economy, experts say. In countries with shaky economic foundations, such as Afghanistan and the Democratic Republic of Congo, telecommunications companies have stepped in to provide missing infrastructure”, explain experts.

“In a way, their leverage goes beyond pure telecom service”, says Svet Tintchev, a World Bank expert on the telecom industry in developing countries, specifying that these companies haven’t competed only for customers, but also cooperated with each other to maintain their networks and set prices to ensure that competition doesn’t become too cutthroat.

The wide insecurity in some cases also guarantees business, given that everyone wants to get in touch with relatives to ensure they are safe.

A thriving business considering that one of the four largest Telecom companies in 2009 registeredsales of about $40 million a year, “substantial in a country where an estimated 70% of the population lives on less than $2 a day”.

Source: MISNA

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