June 22, 2012 ·11 Comments
Dahabshiil’s Telcom Somalia sits in the heart of Bakara market in Mogadishu, Somalia (Photo by Albany Associates Ltd).
HARGEISA — Dahabshiil Group, the leading remittance company in east Africa, is extending its services in the region after it acquired a major telecommunication operator in Somalia this week.
Negotiators reportedly broke a takeover deal that gives Dahabshiil a majority stake in Telcom Somalia, Somalia’s first network service provider, after months of negotiations in Nairobi and Djibouti.
According to negotiators the deal arguably gives the Somaliland-based company a firm control of Telcom Somalia (TS) and an important share of Somalia’s thriving telecommunication market. The deal-breakers said the TS deal is largest acquisition for Dahabshiil without disclosing the agreed amount for the deal.
Telcom Somalia was founded in 1994 and now has offices in Mogadishu and the Puntland region and employs about 100 staff.
Telcom Somalia restructures to give customers a stronger voice
After its complete takeover by Dahabshiil Group, Telcom Somalia this week announced a major restructure of its business, slashing hundreds of jobs across the company.
Dahabshiil has reportedly sacked all the previous Telcom Somalia staff in an unprecedented move designed to drive greater efficiencies and enhance customer service deliveries.
The company launched a regional advertising campaign for new workforce seeking senior and middle management as well as operations including IT, back office, costumer service and support functions.
The Hargeisa-based firm also announced a week-long free calls for all existing and new customers across Somalia. Dahabshiil hopes to have an edge over its competitors. Telecommunication is one of the most thriving and competitive markets in Somaliland and Somalia with more than thirty private carriers and dozens of internet operators.
Telcom Somalia equally launched this week a new mobile banking system dubbed ‘iikaash’ designed to bring Dahabshiil’s remittance family and its mobile users together. The new initiative will allow Dahabshiil customers to send and receive electronic cash remittance from around the country. They will also be able to purchase goods and services with other iikaash carriers making mobile internet more economical and convenient.
Senior Dahabshiil officials said the measures were designed to help Telcom Somalia to maintain a competitive edge and innovations in such a tough emerging industry.
From its humble beginning as a small funds transfer company in Burao, Dahabshiil has evolved into an international success story – operating in 144 countries, with over $300 million annual revenue just 40 years after its inauguration by Mr. Mohamed Saeed Duale.
In recent years Dahabshiil hasn’t been shy about spending. In 2008, the group acquired SomTel in a majority stake, a leading internet and telecoms operator based in Somaliland. It restructured and turned SomTel into a fast growing mobile, internet and e-cash operator.
In early this year, it tried acquiring a 50 percent interest in a cement factory outside the seaport town of Berbera with Somtel’s main retail competitor Telesom, the leading telecoms operator in Somaliland. The transaction was temporarily suspended after a growing opposition by local residents.
The two companies agreed to rehabilitate the destroyed factory for undisclosed amount insisting they would employ roughly 10,000 people.
The local elders who blocked the bid said neither Dahabshiil nor Telesom were qualified to operate such complex facility that requires mining expertise.
The Dahabshiil brand plans to dominate the money transfer industry, banking and telecommunication sectors across markets in east Africa including Somaliland, Somalia, Djibouti, Kenya, Ethiopia and South Sudan.
Its latest acquisition will bring Dahabshiil into direct competition with the leading Telesom, Hormuud Telecom and Golis Telecom carriers in Somaliland and Somalia. With its vast cash resources generated across three main sectors, Dahabshiil is set to dominate the market within the next five years.
Apart from its revenues unmatched in the region, the company also has direct access to a fibre-optic cable currently been rolled out across Somaliland by SomCable Ltd. The project connects Somaliland, Djibouti and landlocked Ethiopia. Consumers in the region will have access to new generation voice, data, video and internet broadband services thanks to the 10,000km EASSy submarine cable that is deployed of the coast off Somaliland and Djibouti.
SomCable Ltd is investing $53 million into the project and plans to sell up to one gigabit per second connections to retail service providers (ISP) such as SomTel, Telcom Somalia and Telesom, who will then resell Internet access and other services to consumers.
The takeover of Telcom Somalia means Dahabshiil will now deeply penetrate Somalia’s thriving telecom industry without the need to relocate some of its SomTel assets. It hopes the two will function side by side across the two Somali borders.
Consumers and hopeful employees have welcome the deal between east Africa’s leading remittance company and Somalia’s first telecommunication carrier. Telcom Somalia has its main headquarter in Mogadishu’s Bakara market and offers a range of wireless services.
June 22, 2012Follow @somalilandpress