
Following a referendum, oil-rich South Sudan seceded from Sudan in 2011 and became an independent nation. Having been deprived of investment for decades, it inherited one of the least developed telecommunications and internet markets in the world, while other infrastructure is also lamentably poor.
Although this potentially can create investment opportunities for infrastructure and service providers, such developments largely depend on a negotiated end to the protracted civil war which erupted in December 2013, and which has caused considerable mayhem and bloodshed, particularly in the oil-producing areas. With the civic struggle exacerbated by large-scale famine, investors in all economic sectors have been discouraged.
There was once investment activity among mobile network operators who sought to expand their networks in some areas of the country, but by late 2016 both Zain South Sudan and MTN South Sudan had cut back their workforces in a bid to save on operating costs, while their falling subscriber bases have strained revenue. Zain South Sudan in particular recorded considerable financial losses in 2015 and 2016. Operators in the telecom sector, as in other markets, have placed themselves in survival mode and are hoping for a political settlement and a return to some degree of social stability. Although MTN and Zain reported a significant fall in the number of mobile subscribers in 2017, with a consequent severe decline in revenue, both saw subscriber bases increase in 2018 as they absorbed customers which had migrated from VivaCell after that company was closed down for failing to pay back taxes.
South Sudan has one of the lowest mobile penetration rates in Africa. Growth in the sector in coming years is premised on a resolution to the political crisis and a recovery of the country’s economy. The virtually untapped internet and broadband market also depends to a large extent on the country gaining access to international fibre optic cables and on a national backbone network being in place. Sophisticated infrastructure solutions are needed to reach the 80% of the population that live outside of the main urban centres. With a negligible rate of bank account ownership, mobile payment and banking solutions also have a strong potential once a reliable mobile infrastructure is built.
The limits to growth are currently defined by widespread poverty and a low literacy rate, but the government recognises the positive feedback loop on development that access to ICT can have and is providing a range of investment incentives. The international community has provided billions of dollars in aid to strengthen governance and institutions in the young nation.
Some improvement has followed from the cable link completed by Liquid Telecom in February 2020 which connects Juba directly to the company’s submarine landing station at Mombasa. The cable is South Sudan’s first direct international fibre link and has helped drive down the price of retail internet services for residential and business customers.
BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.
On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.
Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.
The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.
Key developments:
- Zain South Sudan launches M-Gurush m-money service;
- South Sudan gains its first international fibre cable link;
- Report update includes operator data to Q2 2020, ITU data for 2019, Telecom Maturity Index charts and analyses, assessment of the global impact of COVID-19 on the telecoms sector, recent market developments.
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