Mobile phone usage has exploded in Africa over the last decade, with 197.4 million mobile phone users in 2006, up from just 25.3 million in 2001, according to the UN’s International Telecommunication Union. The growth was so spectacular that some of the bigger markets like South Africa and Nigeria have already shown signs of consolidation. But analysts say there is still plenty of room for growth in Sudan.

Ahmed Haroun’s tiny newspaper stand in the middle of Khartoum is plastered with mobile phone posters and strings of pre-pay cards, wallpapering the back of the shack and hanging down in front of customers like festive decorations.

Outside, the street is cluttered with advertising urging passersby to sign up with state-run Sudani, South Africa’s MTN or Kuwait’s Zain. Even the rubbish on the pavement is littered with bent and used up mobile phone scratch cards, most of them in the smallest denomination of five Sudanese pounds ($2.50). It is a scene repeated endlessly across Sudan’s dusty capital, on street corners and roadside shacks, each of them a front line in the fierce battle for mobile phone customers currently raging across Africa.

Sudan, the sixth biggest African country by population, came to the growth game relatively late. It missed out on much of the early days of the telecom boom, thanks to the turmoil of more than 20 years of civil war, compounded by an illiberal telecom market and crippling economic sanctions imposed by the US.

The world’s telecom companies, encouraged by a welcome liberalization in the national market, have been rushing into Sudan to scoop up as many new customers as they can get their hands on. There are now three established players in Sudan — Sudani, MTN and Zain.

Canar, a fixed-line group owned by UAE’s Etisalat, has also been negotiating for a fourth national mobile license over recent months. The market has become so crowded that Zain’s chief executive in Sudan warned that the granting of yet another license would force him to reconsider a huge expansion package. “We definitely think that the market can continue to grow,” said Andrawes Snobar, senior research analyst at Jordan’s Arab Advisors Group.

“The presence of three mobile operators in the market right now means there is plenty of competition. That will lower prices and increase the number of services offered to new subscribers. And that will increase the number of subscribers. “The mobile phone penetration is also very low in the country compared to regional standards and absolute levels.” Devine Kofiloto, principal analyst at UK-based Informa Telecoms & Media, agrees. “Sudan is a very interesting case, based on the parameters of low penetration and high population,” he said.

Near virgin territory for operators

At the end of 2006, just over 13% of Sudan’s 40 million-strong population had access to a mobile phone, according to the latest figures released by the Arab Advisors Group. Investors would have to search far and wide to find an equally sizable market and attractive penetration statistics elsewhere in the region.

Three out of Africa’s six biggest countries by population — Nigeria, Egypt and South Africa — already have mature mobile markets. No outside operators are allowed into Ethiopia, where the huge and inefficient Ethiopian Telecommunications Corp holds a state monopoly. That only leaves the Democratic Republic of the Congo — with its 60 million inhabitants, of which only 9% have mobiles phones, according to Informa — to rival Sudan in the investment stakes. Analysts thus concur: There are plenty of opportunities for expansion in the country.

Khartoum may have plenty of handsets and mobile phone masts. But huge areas of the country — from Darfur in the west, to the Red Sea coast in the east, remain near virgin territory for operators. If new mobile licenses prove hard to come by, there are always other ways in. Sudatel floats on the Bahrain and Abu Dhabi stock exchanges.

Another largely untapped opportunity lies in South Sudan with two mobile licenses of its own, currently held by the tiny operators Gemtel and NOW. Both could be tempting acquisition targets. Big names that are still on the sidelines without a stake in Sudan include the Anglo-South African Vodacom and Egypt’s Orascom Telecom.

Guilt by association

As in all markets, there are also risks. One of the biggest, especially for any operators with ties to Europe or the US, is the possibility of getting tainted through association with the festering conflict in Darfur. Human rights campaigners have mounted huge publicity campaigns against foreign companies suspected of propping up the Sudanese government or supporting atrocities in Darfur. German engineering giant Siemens, which has a sizable telecommunications division, pulled out of Sudan last year citing “moral and political” reasons. France’s Alcatel-Lucent has also been forced to defend its business interests in Sudan, following campaigns by divestment and human rights groups.

Most affected of all has been Sudan’s own national operator Sudatel, controller of the Sudani mobile brand. The company was one of 31 Sudanese groups barred from doing any business with US companies last year, after the White House accused it of “contributing to the conflict in Darfur.” But even that exclusion from the world’s biggest economy has not prevented Sudatel from finding its own opportunities for growth. In December, it snapped up a 70% stake in Intercellular Nigeria Limited. Three months before that, it spent $200 million on a mobile phone license in Senegal.

When Sudatel’s CEO Emad Ahmed was asked by reporters what impact America’s sanctions were having on his business, he replied: “The sanctions do not affect Sudatel at all. We are still dealing with the main builders of telecommunications … except American companies. The technology is available everywhere: it is available in Europe, it is available in the Far East and China, especially in China.”

Never good, the dusty red roads of South Sudan’s capital, Juba, have been further potholed and haphazardly widened by the steady increase in traffic since peace between north and south was signed in 2005, ending Africa’s longest running conflict.

In the same three years sprawling markets filled with crockery, cloth, never-before-seen vegetables and thousands of bright, cheap Chinese motorcycles have sprung from areas that formerly housed soldiers, half-buried mines and unexploded ordinances.

Small hills of the side-products of peacetime plenty — Ugandan water bottles, Congolese plastic bags, milk powder packets from Mombasa — pile up on every street corner. Foreign journalists dropping in have called the former garrison, miserably cut off during the long years of civil war, Africa’s new “boom town”.

But while Juba has plenty of northern Sudanese, Somali and Kenyan wholesalers, thousands of Ugandan traders and a fair share of Chinese restaurateurs, it is hard to find a new southern businessman.

“They are not used to business, but to war,” Ahmed al-Nour explained. He works in a north Sudanese-owned hardware shop whose shade attracts a few of Juba’s increasing street children, squinting up at that sun with their hands outstretched for coins.

And, al-Nour says, although the armed conflict that killed 2 million people and displaced a further 4 million is over, there is a strong sense that the struggle for the South still continues.

He explains that the most important thing for southerners is to hold on until 2011 when, under the terms of the peace deal, they will have their chance to vote for independence in a referendum.

“They (Khartoum) have not made unity attractive, the south will separate,” al-Nour said.

“We are just waiting, every year,” echoed Paul Amoko, an unemployed ex-soldier desperately looking for work in Juba’s crowded hospital in another part of town. Like many, he has looked instinctively to the new government for a job and not the private sector.

The secession vote is just one part of the three year-old North-South peace deal that also gives the South 50% of revenues from the oil-rich region and enshrines democratic transformation of the country together with wealth and power sharing.

The largest of the former southern rebel groups, the Sudan People’s Liberation Movement (SPLM) who signed the deal with Khartoum’s leading National Congress Party, now leads the semi-autonomous southern government, headed by President Salva Kiir, who is also the First Vice President of Sudan.

Lack of trust

Part of the mandate of the two signatories to the Comprehensive Peace Agreement (CPA) is to make unity attractive. Although, confusingly, many members are open secessionists, the SPLM in theory stands for union with northerners; based on the choice of the South’s population, probably standing at around 10 million people.

But after more than 50 years of on-off war over ethnicity, religion, ideology and in more recent years, oil, many southern Sudanese believe independence is the only path to freedom, a coming of age from southern anxiety to the normalcy that is a pre-requisite for real development.

“I, even, am one of the ones who will remain reserved until 2011,” Elizabeth Majok, head of the Employees Justice Chamber said. 

She agreed that southerners, who also have little experience, have missed out on many of the business opportunities that arrived with peace because they are waiting and not acting.

Majok argued that after many broken promises for southern equality by various northern governments, and what she sees as a distinct lack of commitment to the new peace deal by Khartoum, southerners are throwing themselves behind the promise of independence, not the current peace.

A long and troubled journey

Both sides have accused the other of violating the CPA deal and slowing down its implementation. Scuffles over oil agreements with foreign companies and occasional armed hostilities have contributed to keeping tension high between the former foes.

But international alarm peaked following a decision by the SPLM to pull its ministers out of a Government of National Unity in October, protesting the failure of northern soldiers to redeploy out of the South and their lack of real influence in the coalition.

The former southern rebels accused Khartoum of unwillingness to implement the deal, saying they were purposely dragging their feet.  

However, SPLM ministers went back to work in December, ending the crisis after Sudan’s President Omar Hassan al-Bashir agreed to some of the demands by the SPLM ministers. He reshuffled the cabinet and re-funded the delineation and demarcation of the contentious North-South border. But new deadlines for the late withdrawal of northern troops out of the South have been missed since. When fighting broke out along the border in December between southern soldiers and armed northern nomads  President Kiir said the nomads are supported by Khartoum, exciting tensions. 

The SPLM is also accusing President al-Bashir of withholding cash due to the southern government, leaving much crucial work in the South behind schedule. The southern government is almost wholly dependent on their share in Sudan’s 500,000 barrel per day production. Officials frequently complain there is a lack of transparency in how figures are calculated and say Khartoum is claiming wells beyond the border as theirs.

South Sudan’s Minister for Presidential Affairs Luka Biong said that the South is missing $1 billion from the oil-rich Abyei area alone, which both North and South fiercely contest as their own.

In a speech during southern celebrations of the third anniversary of the peace deal earlier this year, Kiir said that given the struggles in implementation so far, a much better relationship between the signatories is needed to get through a national census, democratic elections, and the 2011 referendum.

The pre-fab problem

From the road, the Beijing Juba Hotel looks almost as grand as its name. With its two stories and gold pillars guarding the entrance and sitting on prime Juba land it looks a world away from the tumbled-down cement houses and huts that makes up most of the southern capital.

But the lettering is cut from polystyrene and painted black and the building itself is pre-fabricated, put together from a giant kit over a few weeks by the Chinese owners. Pieces from the lurid blue and green mosaic floor inside are already chipping away.

Providing accommodation for the sudden in-rush of thousands of international aid workers and government employees that suddenly massed in the small capital, the Beijing Juba Hotel is even more expensive than most of the some 35 other tented or pre-fab camps that sprang up after the peace deal.

Like the dozens of restaurants that cater to internationals and former rebels flushed with government job cash, almost all of them are owned by foreigners.

Charging up to $200 a night, the owners hope to make back their investment in five years, after which the giant, presumably sun-worn prefab will be given to the southern government as a “gift”. 

It is not only southerners, Majok said, who are waiting for 2011; international investors, nervous about war breaking out again, are also “one foot in and one foot out”.

“Perhaps after 2011 there will be more investment, when people know what is going to happen,” she said. The US has also put sanctions down on Sudan and although the South is technically exempt, some think proper separation would make the region more attractive.

John K. Pan Paguir, director-general of trade at the South Sudan Trade and Commerce Ministry, said that none of the foreign businesses that have registered with the ministry have fulfilled long-term investment promises. All, he said, are in it for the quick money.

These investors, like the thousands of east African traders, are taking their money back out of the country. According to Majok, the short-term mentality — together with the habit of employing foreign staff — is not doing anything to contribute to stability in the South.

“Food is being brought in from outside, there is no real construction, no tax that is equivalent to the millions they are getting. We are not benefiting. At least the workers should be Sudanese.”

An Indian-owned hotel sitting right next to the beautiful and empty blue of the Nile is typical; while 10 or so local girls have been hired for cleaning and to wash clothes, all waiters and bar staff, kitchen staff, many construction staff and all of management are foreigners.

It is Kiswahili as often as Arabic that is spoken under the mango trees.

Four-wheel drives and salaries

Paul Amoko, who spent most of his life in the army before being demobilized, will soon be joined by 45,000 men and women, who the former rebel southern Sudan People’s Liberation Army — struggling with a massive 70,000 parade payroll — want to reintegrate into society.

With the flame of the South’s entrepreneurial spirit still small and with little or no access to cash, many of them will look to the government for jobs, not the private sector.

Although the civil service is already swollen and eating up more than 70% of the government’s $1.5 to $1.7 billion a year in oil revenues, it is obvious why it attracts southerners: it is those in the government who are benefiting from peace most.

For those without a government, or almost equally prized NGO or UN salary, life is tough. According to joint UN and government figures, the South has the world’s worst maternal mortality rate with one in 50 women dying during delivery. Some 10.2% of newborns die in childbirth. Only 2.7% of those who survive to childhood are fully immunized.

Little has changed for the rural peoples who make up most of the southern population, said the parliament’s economic and development head Barri Wanji, adding that so far there’s been little effort at promised decentralization. He explained that parliament had a difficult time last year getting cash out of central control for rural development projects. “[Ministers’] priorities are different from rural areas … where the emphasis is on high salaries, emphasis is on getting cars, emphasis is on building good houses.”

But even these high salaries are not staying in the South. Majok explained that she — like all of the South’s top officials — has her family outside, which is where she spends most of her salary on the schools and other services the South still struggles to provide.

And, she added sadly, even those with the backing to get loans from the Nile Commercial Bank — of unclear ownership but propped up with government funds — are probably spending it investing outside of the country.

Growing dissatisfaction at home

While southerners say they are confident that the SPLM will try to maintain peace, there is also a growing discontent with the party’s ability to deliver services to underdeveloped communities and deal with corruption within its ranks.

“Even [with] the roads, nothing is happening,” said John Mabior, a soldier, who added that money was being lost to corrupt politicians rather than reaching the people. “It is now a very big problem in southern Sudan.”

A report from the government’s Anti-Corruption Commission on government contracts in mid-2007 is still not available to the public but one government official described the contents as showing “shocking … overspending.”

And it is unclear whether investigations are still moving forward or not in what has become a test-case for Kiir’s zero-tolerance on corruption, said an MP. Over $70 million was spent on government vehicles, bought at twice the market rate. Most never arrived.

But no other southern party has yet challenged the SPLM’s supremacy. And as one Juba citizen put it, in their current position, waiting for independence, southerners have little choice. “There is room to play, to discuss with the SPLM. With the North, there is no room.”