Just four years on after decades of conflict, South Sudan’s economy is still nascent and officials from the region — desperately under-developed when compared to neighboring Kenya and Uganda — have struggled to attract foreign investment.
But mobile telecommunications have steamed ahead and the past year has seen hundreds of new towers erected across some of the swampiest parts of the south. Two companies, MTN and one of the world’s biggest operators, Kuwait-based Zain, have opened for business this year. Since Zain’s launch in April, the company has left all other operators behind in tower-construction, telecommunication ministry officials say.
Zain’s CEO, Khaled Mutahdi, said the company planned to spend up to $150 million in the region. MTN have also embarked on rolling out from main towns to smaller population areas. Although only a miniscule number of offices have working land lines, most of Juba’s civil servants, businessmen and politicians move about town with between two and four phones at all times. Not one of them has reception all of the time. After four-wheel drives, mobiles are easily the number one peacetime accessory. But despite the gadget-obsessed passion for mobile telephones, operators are racing to provide improved services to survive in an environment of increased competition. A new player will enter the market shortly in the form of Vivacell.
“The launch will be very soon,” said Joe Audi, the company’s marketing manager in Juba. Audi was unable to provide details of the total value of the investment. Vivacell is essentially a re-branded Network of the World (NOW), one of two South Sudanese companies that emerged out of the region’s 21-year insurgency. In 2007, senior officials in the south’s telecommunications ministry said NOW was at least partly owned by the Government of Southern Sudan (GoSS) and that they were trying to find a buyer to take over the license. More recently they have said the ministry had nothing to do with the sale. Part of the company is still owned by southerners, Audi said.
“Vivacell has operations in Armenia, but those are now partially owned by Russia’s MTS operator,” Audi added. Vivacell-MTS has 1.7 million Armenian customers according to the company’s website. New Ericsson equipment has since been installed with initial plans to cover four of the South’s larger towns of Juba, Yei, Bor and Torit. The company will begin by selling SIM cards, but will also eventually provide GPRS systems that will mean customers can access the Internet on the move. “We’ll start with prepaid services through a distributor,” Audi explained, adding that tens of towers would be installed by the end of this year and eventually Vivacell will have at least 100 employees running the GSM system.
Who’s ringing in?
NOW has been little more than a name since members of the south’s rebel movement established it during the war. During peace negotiations both Khartoum and the rebel Sudan People’s Liberation Army/Movement (SPLA/M) had to bring all existing telecommunication contracts to the table. Khartoum presented Areeba (now MTN), Canatel, Sudatel (now Sudani) and Mobitel (now Zain). The southern rebels got Gemtel and NOW recognized. All companies have until 2010 before either side can sign any new contracts.
Ambiguity in the peace accord over whether or not Gemtel and NOW would be allowed to work in south Sudan led to many months of disagreement between Khartoum’s telecommunication ministry and Juba. A 2007 memorandum between north and south Sudan re-established the right of the four northern companies to spread across the south, but did not return the favor to the two southern companies, which must stay south of the border. Northern companies were given access to start building or re-building their operations in the south. In return the southern government was allowed to build and run its own gateway. The gateway contract was won by Ericsson and will be completed early next year at the cost of $17 million, said Stephen Juma from the south’s Ministry of Telecommunications and Postal Services.
With the new gateway, the south will be able to monitor calls made in the south and make money directly from operators who use it. All operators interviewed said that they have agreed to use the separate southern gateway for southern calls. This will also drive down prices from government-owned Gemtel, which still uses a gateway in Uganda as opposed to Khartoum. Southern politicians did not want Sudan’s capital to be able to control calls. In order to place a call to any one of roughly 20,000 Gemtel users from another operator in Sudan, one must wait while a Hong Kong satellite beams the call back via Uganda, explained Gemtel manager Sam Mitwe. Uganda also charges South Sudan’s government $50,000 a month for the gateway usage. As a result, phone calls are enormously expensive and 2008 saw many subscribers switch over to MTN and Zain in order to save money.
“When we get the gateway, our dialing code will change to +249 and prices will go down drastically,” Mitwe said. Gemtel SIM cards are just $22. But unlike Zain, this year’s other newcomer MTN, does not offer a deal in which to purchase a telephone as well. MTN’s Kenyi Ali, head of sales in the south, said the company has distributed SIM card packs across Juba as well. The bright yellow boxes are noticeable in many small, tin shacks, which also sell beverages and daily necessities. Zain, on the other hand, registers all users in its Juba office. Both new customer care officers are busy for most of the day with new subscribers. Most lines in Juba are still not operating at 100 percent. Operators have blamed this on undisciplined use of the spectrum, with some operators barging into others’ sections and causing interference.
A tough call to make
Whatever the reason for the poor line quality in the South, people with enough cash try and increase their chances of getting through by keeping two or three mobiles on them at all times. Sudani, Zain and MTN offer a handset (Samsung for Sudani, Nokia for Zain and Huawei for MTN), as well as a SIM card, for less than $45. South Africa FIFA sponsor MTN, which started work in the south in April, has also introduced three tariff plans.
Ali said that MTN had already begun raising its profile in the south, sponsoring cultural and other events. Like Zain, Gemtel and Sudani, MTN towers cover most of the south’s big towns already and, like other operators, they are expecting to enter more rural areas this year. Up to 30 MTN towers are already up across the south, with six out of a planned eight in Juba itself. MTN has provided a cheaper service to the numerous southerners who have families and friends in neighboring East Africa, where millions of southern refugees fled during the war and where the company already has a good customer base.
In 2007 the company recorded over 44 million users in 21 countries, according to its website. MTN-to-MTN callers get a 50 percent discount on international calls to Uganda, Kenya, Tanzania and Rwanda. The largest proportion of Gemtel’s clients are in the south end of South Sudan. Many of those have relatives and work in next-door Uganda and Kenya. In the northern parts of the region, mobile phone users tend to have closer connections in Khartoum.
Mitwe said the company is also introducing new technology to try and keep its customers from joining the new companies. Heavy rains or even strong sunlight sometimes affects the satellite technology used to transmit calls across the region. Hence, a more reliable microwave link system, in which a series of towers transmits calls, is being built and several towns are already linked in this way. “We’re the first to do this,” Mitwe said.
