Despite challenges, Somalia benefits from digitization

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Despite challenges, Somalia benefits from digitization

Much like the industrial revolution, the privatization of the Internet in the early 1990s led to a boom in all sectors of the global economy.

Somalia gained its first Internet connection in the late 1990s and early 2000s. However, the true mass rollout of Internet adoption did not begin until after 2015. Since then, the penetration rate Internet has grown at lightning speed.

Despite this growth, Somalia, like many other African countries, has very limited digital infrastructure such as the Internet backbone, broadband services and other critical digital infrastructure.

For example, due to insecurity, there is no internet backbone connection between major cities, thus limiting the ability to provide high-speed internet access to people living in different regions, especially those in the south and south. central Somalia.

Take fiber optic cables for example. These are the primary Internet backbone media on which digital services rely. The more a country expands its fiber optic capacity, the greater the penetration of the Internet and the less it costs.

However, Somalia is notoriously expensive when it comes to laying fiber optic infrastructure, especially in rural and suburban areas due to factors such as, but not limited to, security threats, property land tenure, the shortage of professional labor and limited financial options.

On the other hand, and against all odds, Somalia ranks number one in Africa in terms of low cost of mobile internet and number seven in the world. This phenomenal achievement has been largely attributed to the liberal, private-led nature of Somalia’s markets and economy.

There are currently seven telecommunications companies serving a population of 15 million people. This means that the competition is stiff and the markets are very efficient with limited or no entry and exit buriers.

Digital infrastructure improvements

Somali businesses are advancing in the local and international economy by relying on the digital infrastructure and high penetration rates of Mobile Money. A few years ago, Hormuud Telecom – the largest telecommunications operator and mobile money provider in Somalia launched its mobile money platform – EVC Plus API which enabled local merchants and e-commerce providers to ” access flexible payment platforms.

Businesses and delivery service providers as well as the general population could also easily buy and sell and transfer money free of charge through their mobile phones.

This created a whole new ecosystem and business model led by young and dynamic businessmen and women. Innovations such as EVC Plus APIs and the deployment of Internet backbone services will boost economic growth in Somalia and create more jobs and services for the public, as Hormuud and other telecom operators introduce improved services with broad options for making and accepting payments.

By: Yasin Hassan, Communications Manager, Hormuud Telecom.

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