Calling a contact in South Sudan can be frustrating. Business cards can list many numbers, and it can be necessary to trawl through each option before the correct one is reached. This may seem like a strange practice in the rest of the world, but in the world’s newest nation, this is not unusual.
In Africa handsets often have room for four or more cards, so users can switch between providers and catch the best tariffs and deals from hour to hour, place to place.
In South Sudan, a country which descended into civil war soon after independence almost four years ago, phones – and the telco market at large – say a lot about the region’s woes. Sorely underdeveloped, bitterly contested and portentous, South Sudan faces a crossroads between a bloody abyss and huge potential. Likewise the operators who’ve stuck with it through the gunfire.
South Sudan is a landlocked country of around ten million people in central Africa, which split from its northern neighbour in July 2011. It is roughly the same size as Ukraine, or Texas. Since December 2011 South Sudan has been locked into an amaranthine conflict, spurred chiefly by discord between the ruling Dinka and opposition Nuer tribes. To date around 50,000 have been killed and 1.5 million displaced by the war, which continues to rage in the border regions with Sudan.
Juba, hundreds of miles south of the fighting, is on alert. Police and military patrols creep along main roads, gun turrets propped high. Infrastructure is sporadic. The highest-profile municipal project was 98 solar-powered street-and-traffic lights, installed last summer by the Chinese government and Huawei Technologies Company at a cost of $800,000.
Corruption is rampant – South Sudan places 171st of 175 nations in Transparency International’s Corruption Perceptions Index – and it ranks third-bottom in the World Bank’s ‘East of Doing Business’ poll. In a bizarre clash of this, and the young government’s growing autocracy, Huawei was forced to apologize after admitting to a hack of government email accounts, in relation to a $51 million digital television migration deal.
“If you want a microcosm of South Sudan’s troubles,” one U.S. peacekeeper says, “take a look at telecommunications.” A glance reveals just that. Internet penetration stands at less than 1%, with broadband subscribers counted in the hundreds. This market is shared by 15 ISPs, including Kuwait-headquartered Zain, Uganda’s RCS and iBurst, from South Africa. Due to the lack of fixed-lined infrastructure, they provide services via WiFi or WiMAX systems via VSAT terminals.
Mobile penetration in the former Sudan stood at around 42% upon the country’s schism. That the figure was below 20% in the embattled south said a lot about Khartoum’s commitment to it. Despite numerous initiatives infrastructure remains almost nonexistent in vast swathes of South Sudan. 80% of the population live rurally. Many are nomadic pastoralists. The government has pledged electricity to 70-80% of the people – by 2020.
Telcos come under the jurisdiction of the telecommunications and postal service ministry, and the newly-formalized National Communication Authority. Othow Okoti rides a motorcycle five hours to deliver letters from Juba to his hometown of Yei, near the borders with Uganda and the Democratic Republic of Congo. The distance is little over 100 miles. “There isn’t a postal service,” he says. “There’s me and my bike.”
Today mobile penetration has crept up to around 22% or 2 million people, according to BuddeComm, an analyst. Almost all phones are pre-paid owing to widespread poverty (half of all South Sudanese people live under the bread line). The market is dominated by four main players: Zain (41% share); Vivacell (34%); MTN (21%) and Gemtel (4%). Regulation is still being constructed under a regional framework involving Uganda, Rwanda and Kenya.
“Despite the political chaos and socio-economic mess there are opportunities for investors in the telecom sector, since this is too fundamental to be left untouched,” says Henry Lancaster, a researcher at Budde.
Zain has faced several hurdles to set up shop in South Sudan, its local CEO Basel Manasrah, tells me. Not least was the cost of setting up network sites due to the lack of roads. “Added to this is that all sites need generators due to lack of electricity, and the cost of fuel is very expensive,” he adds. “Today fuel costs account for approximately 60% of the overall operating costs.” To date Zain has spent around $350 million in South Sudan, much of which was used to separate operations from Sudan.
The war has put paid to a lot of that investment. Approximately 30% of Zain’s network, across three states, has been declared non-operational due to damage. Repairs are costly, dangerous and take an age. However, says Manasrah, “we expect to reinstate approximately 20 sites in the coming months when we relocate a major switch site from Malakal [a large town near the front line of the war] to a new site.”
There are plenty of obstacles heading into the future, too. Inflation is rampant, and disparity between a government-sanctioned exchange rate and the parallel market rate is causing economic havoc. And despite lengthy talks and lip service, South Sudan’s devastating conflict sees no sign of ending. The standoff between president Salva Kiir Mayardit, a Dinka, and his former deputy Riek Machar, a Nuer, rages on. Violence comes daily.
But the world’s youngest nation has gallons of potential. Literally so, in an abundance oil and minerals – though they have been at the heart of the political clashes. But also in a telecommunications industry that, while embryonic, continues to grow and win successes.
Last month an O3b rocket was launched which will provide increased web connectivity to the country’s remotest regions. The World Bank and African Development Bank’s Central African Backbone project, which began in 2009 and has pledged $215 million over ten years to support countries build fiber-optic infrastructure, continues apace. It hopes to raise an additional $98 million from the private sector.
For now, however, penetration remains low and the number of pre-paid SIM cards in each South Sudanese user’s phone will remain astonishingly high. Visitors to the country should expect to spend a lot of time dialing contacts.