Somalia's Government Plans Regulations, Taxes for Phones

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Somalia will start governing its untaxed and unregulated telecommunications industry to boost growth and investment, said Information, Posts and Telecommunications Minister Abdulkareem Jama.

The government has drafted rules for managing mobile-phone frequencies, phone numbers and interconnection agreements, a system in which telecommunications operators carry cross-network traffic, Jama told reporters today in Nairobi, the capital of neighboring Kenya.

Somalia’s Finance Ministry is finalizing the details of a tax to be introduced to the industry, he said. Both proposals must be scrutinized by lawmakers before going into force, Jama said, without providing a timeline. “It will be something that will not discourage investment,” he said. “We don’t intend to over-regulate or over-tax.”

Somalia’s Western-backed government has been battling insurgents, including the al-Shabaab militia that has pledged loyalty to al-Qaeda, since 2007. Most of southern and central Somalia has been seized by the insurgents, while the government, led by President Sheikh Sharif Sheikh Ahmed, controls only parts of Mogadishu.

The country hasn’t had a functioning central administration since the ouster of former dictator Mohamed Siad Barre in 1991. Small-scale mobile-phone operators set-up businesses in the country and began to flourish amid the chaos, said Jama. The Horn of Africa nation currently has 11 licensed telecommunications companies.

‘Cheap Rates’

“Rates are cheap and service is available everywhere,” he said. “This is a success story. The intention of the government is to encourage this investment and do everything possible to allow this to grow faster.”

The government plans to connect Somalia to an underground fiber-optic cable that links east and southern Africa known as Eassy, enabling domestic operators to switch from slow and unreliable satellite connections, Jama said.

There are no official statistics on the amount of revenue the telecommunications business generates or the number of mobile-phone users in Somalia on account of the disorganization of the industry at present, said Jama.

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