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Somalia issues first spectrum license to Hormuud Telecom

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Somalia's National Communications Authority (NCA) has issued the country's first spectrum license to Hormuud Telecom, a step forward in the East African nation's regulatory environment formalization.

The country's mobile operators have been using spectrum for many years to run their networks but up until this point there was no formal licensing regime.

In February 2022, the NCA established a Unified Licensing Framework and urged companies in the telecoms and ICT sectors to submit applications for spectrum licenses.

Various spectrum bands are already in use across the country, and so the NCA opted to issue licenses upon application and not by auction – which is usually more common globally.

Somalia's Minister of Communications and Technology, Jama Hassan Khalif, said the license marked a milestone for the industry and the country at large and would help push the nation's digitalization agenda forward.

"The Government of Somalia is committed to transforming the nation into one of the most digitally inclusive societies in the world. To achieve our ambition, we require strong private-public partnerships as well as a robust regulatory environment," he said.

Growing competition

The regulator and the government expect that the adoption of spectrum licenses will promote open markets, competition and investment in the telecoms sector.

"The NCA's mission is to create a competitive environment where innovation and investment into the telecommunications sector can flourish through effective regulation. The issuance of the radio spectrum license is an important step towards achieving this aim," added NCA Director Abdullahi Abdulaziz.

Hormuud Telecom's CEO, Ahmed Mohamud Yuusuf, said the formalization of spectrum licenses in the country will also bring stability, structure and growth to the Somali economy.

As part of its license, Hormuud has won the rights to use the following frequency bands: 700MHz, 800MHz, 900MHz, 1.8GHz, 2.1GHz, 2.3GHz, 2.6GHz and 3.5GHz.

Somalia has nine mobile operators and Hormuud is by far the biggest with almost 40% market share at the end of September 2022, according to statistics from market research company Omdia.

Hormuud was the first operator to apply and be given a license, with at least two more licenses expected to follow shortly, according to industry insiders.

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Mobile phone penetration in Somalia is high, with an estimated 90% of Somalis having access to a mobile phone, while 70% of Somalis have access to 4G coverage, Hormuud said.

Mobile money is also used widely and every month Somalis conduct over 155 million transactions, worth $2.7 billion, and only about 6% use cash, according to the operator.

In 2021, the Central Bank of Somalia introduced a national payments system and later that year issued the country's first mobile money license, also to Hormuud Telecom.

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