As one of the leading communication service providers in the Horn of Africa, Telesom was Established in 2002 in Somaliland and has the widest coverage network.
It takes pride of being the first company that introduced the first GSM, Landline, ISP, and later 3G and 4G, as well as the first mobile Money Platform (ZAAD), which has been recognized by GSMA as one of the most successful mobile financial services in the world. Having the highest mobile penetration in Somaliland with universal access coverage, Telesom plays a vital role not only in curbing the digital divide but also becoming the biggest contributor to youth employment and to Somaliland’s GDP growth.
Talking to Africa Leads about the company’s competitive edge, Abdikarim M. Eid, Telesom CEO, says: “Our highly skilled workforce, our capacity to quickly respond to customer needs, and our ability to create an efficient communication ecosystem for our community, are our unique attractions,” underlining that as the first mover, Telesom attaches great value to its customers and building strong shareholder confidence.
Mr. Eid says: “Telesom business model is underpinned by strong market positions in combination with some market-leading assets and resources. This is a difficult combination for competitors to replicate, and we are confident that our business model is sustainable. This is why we continue to invest, foster innovation, maintain strong cost efficiency, strive to deliver superior customer service, and pursue new paths to growth.”
Telesom led the telecommunication market in going far beyond cellular services to financial services and data communication through innovative initiatives, products and services.
“This has not only propelled us towards repositioning our vision and goals but it also boosted our competitiveness,” Mr. Eid says, noting that the company’s future plans include creating opportunities for growth, by investing in Fiber broadband, Ethernet and IP voice services as well as in the portfolio of managed service solutions.
“This enables us to continually improve customer experience through our ongoing investment in fault prevention, automation and selfservice tools. In turn reduces cost base significantly and increases skills and productivity.”
African market leader in mobile money service
Telesom’s mobile money services known as ZAAD is the company’s signature service that raised Telesom’s profile as one of the first wholly African owned companies to provide this service. Elaborating on the evolution of ZAAD services and the company’s future vision for mobile money technology, Mr. Eid says:
“It was June 2009, when we launched the first mobile money services, ZAAD, and it instantly became a game changer in the financial ecosystem. The services and products we provide have evolved from basic mobile money services to advanced digital financial services.
“At the beginning we were focusing on cash-in and cash-out, domestic money transfer, airtime recharge and merchant payment, but the current offering include the Internet work transfer to other MMTs, International remittance, mobile payments (P2B – purchases (shopping); educational institutions (school fee payments); health service providers (charge collection); utility providers (monthly bills for electricity, water, waste, TV, etc and online API enabled offerings etc) and Data recharges.
“One of the uniquely attractive services of ZAAD is a KAAFI, which allows the customer to link his/her mobile money account and bank account to be able to make deposits and withdrawal remotely without going physically to the bank. “
“Bulk Disbursements is an important service we provide to the majority of the employers and UN and international organizations for payroll payment, financial aid and grant distribution.”
ZAAD Services is continuously improving to provide user-friendly mobile money features for the whole community and to extend it to Telesom’s stakeholders in key financial services in a bid to transform the virtual connectivity of financial services into reality.
Commenting on how growing technological advances in Africa assist the company’s operations, Mr. Eid says: “The technological advances in Africa, especially our regional market has increased the adoptability of the new product/services we offer to the market. For example, we were the first to launch Mobile Money Services in Somaliland in 2009; we carried out numerous marketing campaigns to sell the services but it was the advances of technology that made our work easy and people quickly adopted it, making the financial inclusion as the highest service we have although most of the people do not have Bank Accounts.”
“This also provides us an opportunity to expand our business and offer latest technology since 75% of our population are under 30 years. We know the market can handle it but the traditional low-end technologies are also still relevant in the long term in Africa due to high illiteracy and the fact that a large number of the population still lives in rural areas.”
Giving an insight on how the company managed the market developments of 2016 in terms of economic slowdown, and the fall out from political developments in EU and USA, Mr. Eid points out that in 2016, the EU and USA experienced some economic slowdown due to UK’s Brexit from the EU and USA elections, noting that although the industry was somehow affected, particularly the remittance sector, Telesom’s efficient marketing strategy and risk management and prevention practices helped it maintain robust business.
Demand for empowering regulations to create dynamic industry
On the role African governments can play in enacting regulations to address the operational concerns of the industry, Mr. Eid notes that the telecommunications industry and Regulations had long history over the past decades and that there were different practices in different parts of the world.
“But now most of the industry is liberalized and privatized, leading to technological advancements and drastic infrastructural improvements. Therefore, African Governments should be proactive to liberalize the telecom market and put and affective regulatory in order to create level playing field for competition and creating a dynamic industry,” Mr. Eid says.
“Regulations have their impact on the telecom industry and the balance of its efficiency, so Telecom investors, particularly in Africa, require empowering regulations that can promote favorable market conditions for competition and innovation, while at the same time protecting the consumer interest.”
Measuring success on customer satisfaction
Answering a question on how Telesom is working on increasing its network in Africa and strengthening consumer confidence, Mr. Eid says:
“We believe that the greatest impact we can have on our society is to provide reliable and secure networks. Getting this right is essential for us in building trust with our customers and in enhancing in our brand value.”
“Our strategy starts with customer service and we always try to improve the experience we provide to our customers. ‘Right first time’ is our key measure for customer service.
“We also conduct our business in a way that creates shared value for all relevant stakeholders. We provide the power of digital communication, enabling everyone to improve their lives. We bring vital infrastructure, new services and products that stimulate progress, change and improvement. We exist to help our customers get the full benefit of being connected and we measure our success on how passionately our customers embrace our services.
“The company’s vision, mission and values express Telesom’s future and the role it will play in both transforming people’s lives and empowering the local community to grow and progress.”
UAE-led growing trade between Africa and GCC
On the trade between Africa and GCC, particularly the UAE, and how the two regions can capitalize on their geographical proximity, rich natural resources and human capital to achieve further economic cooperation, Mr. Eid says: “The UAE is one of the leading exporter of goods to several African countries as well as being among the top ten importer of goods and commodities from a number of African countries Therefore, Africa is fast emerging as one of the most important markets for the UAE. The UAE has also moved fast to penetrate newer markets within the continent such as Somaliland.” He describes the relationship between GCC and African states as a historical one, based on geographical proximity, trade and socioeconomic ties.
He says although traditional trade between GCC countries and Africa was concentrated in North Africa, business focus recently expanded to sub-Saharan countries. Among the most significant is DP World’s investment of $442 million in Berbera port of Somaliland, and Rani Investment, based in Dubai, being a key investor in Mozambique’s tourism industry operating a number of luxury hotels. Several UAE and GCC companies are also investing all kinds of business sectors in Africa, showing a sign of growing and sustainable trade.
“As a leading investment pioneer in the region, the UAE can help establish GCC-Africa investment forum that can create a conducive environment for mutual investment between GCC & Africa.” Mr.Eid says.
Commenting on Africa’s telecom sector, Mr. Eid says: “Telecom sector has great opportunities in Africa, mainly due to privatization which opened active competition for new business. During the past seven years, Africa’s telecommunications has been the fastest growing market especially the mobile market and there is nearly 960 million mobile users in the continent. Many African mobile markets grow over 100% per year.
He says Africa’s money transfer market will witness dramatic increase in market share due to technological innovations that led to lower transfer cost. “This is the new reality where African and Asian mobile financial services are changing the remittance landscape,” Mr. Eid said.
Telesom’s expanding portfolios
Explaining his company’s targets in 2017 and the market prospects to help them achieve their expected growth, Mr. Eid says: “Telesom is a growing company of a number of portfolios. Our plans for 2017 are aimed at improving our customers’ satisfaction by offering best product/services as we always try to do. We are focusing on investing product / services, which the customers need most. We are currently deploying Fiber Optic Cables to enhance our customer experience and build strong communication ecosystem as part of G2A (Gulf to Africa) and DARE Cable (Djibouti Africa Regional Express). Both cables will be landing in Berbera port.”
On SOMGAS, Telesom’s energy portfolio, Mr. Eid says it is the leading multi-million LPG GAS provider in Somaliland which was built as Gas Terminal in Berbera, underlining that it will lower the costs of the gas and help protect the environment by preventing cutting trees for charcoal.
“There is also a great demand for low cost energy; therefore, through Telesom Electric Company (TEC), we are working on delivering continued and low cost electric supplies to both households, small factors and the business sector. Our target is to increase investment in solar energy,” Mr. Eid says.
“We are also focusing on offering micro-finance for low-income customers, so that they can either expand their business or uplift their economic performance. This will be extended through Darasalaam Bank, one of our subsidiaries.
“Therefore, our market prospects are highly positive and as such, we are continuously investing new technologies, increasing our strategic partners in order to satisfy the needs of the markets we operate,” he says.
Answering a question about African participation in Dubai Expo2020, Mr. Eid notes that the event will be a good opportunity for African business to get international exposure.
“It can give a powerful drive for development in the whole region. African companies will benefit from the experience of Dubai Expo2020 and it will create more investment prospects. It will also establish new trade channels between Asia and Africa and thus increase the trade volume” he concluded.
Business Report 2017