DUBAI, June 19 |
Higher taxes and mounting competition are also posing challenges for the African country's three major telecoms players as they battle to tap the potential of a relatively underpenetrated market.
Sudan lost three-quarters of its oil output when South Sudan became independent in July, ending its main source of state revenue and foreign currency.
That made the telecoms sector even more critical to the wider economy and it now accounts for about 12 percent of gross domestic product, according to No.1 operator Zain Sudan, a unit of Kuwait's Zain.
Yet operators are struggling to buy hard currency from the government.
"The availability of foreign currency is a big issue for telecoms companies because we depend on imported services and equipment," Zain Sudan chief executive Elfatih Erwa told Reuters.
He said Zain had sometimes delayed payments to foreign suppliers, but these were still delivering on schedule. Ericsson and Huawei are Zain's main suppliers.
State-owned Sudatel has faced similar problems.
"It (the equipment) is mainly from Asia," said Mohamed Nasir, Sudatel director for corporate sales. "There are limitations in the use and transfer of U.S. dollars. We are talking about Chinese companies like Huawei mainly. It (deliveries) can be delayed - if something took one month (before), it may take two months now."
MOUNTING PRESSURE
The dollar shortage is an indicator of the mounting pressure on the Sudanese pound.
Last month, the government allowed licensed dealers to trade the pound at a devalued rate of about 5 to the dollar. This compares with the official rate of 2.7, while there are two other exchange rates - the black market rate of around 5.4 and the commercial bank rate, which is about 4.9.
"We don't work in the black market, we deal with banks and they charge us a premium," said Erwa. "It's a little bit lower than the parallel (black) market price. The official price is still the same as before."
Zain Sudan's 2011 local currency earnings rose 9 percent, but these fell 5 percent in dollar terms and its parent firm has been blocked by Sudanese law from repatriating earnings to Kuwait for several years.
These woes, along with mounting competition between Zain Sudan, Sudatel and MTN Sudan, a unit of South Africa's MTN , have taken away some of the sector's lustre, with Zain Sudan's average revenue per user (ARPU) falling by half between 2008 and 2011 to $8.
Higher taxes are adding to the burden. In December, Sudan raised sales taxes on telecoms companies to 30 percent from 20 percent and a profit tax to 30 percent from 15 percent.
Yet the market retains huge potential should Sudan and South Sudan's economic woes ease.
Mobile penetration in Sudan is 67 percent, according to analysts Wireless Intelligence. This compares Northern Africa's 96 percent, while South Sudan penetration is just 18 percent, one of the lowest globally.
ARPU is also higher than the Northern Africa mean of $6.47 - Sudan's is $6.90 and South Sudan's is $10.49.
South Sudan has five mobile operators - Zain, Sudatel and MTN, plus two local firms. (Reporting by Matt Smith; Editing by Mark Potter)
Newer articles:
- South Sudan Independence Celebration Planned For Mankato - KEYC TV - 21/06/2012 00:00
- South Sudan outlines budget for uncertain times - Reuters Africa - 20/06/2012 14:32
- Africa Debate: Has South Sudan lived up to its expectations? - BBC News - 20/06/2012 02:48
- UN agency starts flying in emergency aid for refugees in South Sudan - UN News Centre - 19/06/2012 19:11
- JobsDDG Programme Manager - South Sudan - Reuters AlertNet - 19/06/2012 16:04
Older news items
- Security Council Urges Immediate Action on Sudan, South Sudan ... - Voice of America (blog) - 19/06/2012 07:36
- UN concerned by delays in peace bid for Sudan, South Sudan - Reuters - 19/06/2012 01:01
- Death from dehydration: New influx of refugees in South Sudan in ... - Washington Post - 18/06/2012 18:34
- Dehydration deaths: Refugees in S.Sudan need water - The Associated Press - 18/06/2012 18:32
- Israel begins deportation of South Sudanese migrants; Interior ... - Haaretz - 18/06/2012 16:21
Latest news items (all categories):
- UNDP and the Office of the Vice President Launches the Women and Youth Leadership Program in South Sudan - 14/02/2025 11:37
- The Grave Blunders And The Paradoxical Ways In Leadership Sector - 14/02/2025 11:32
- ADF approves $153.66 million for Uganda-South Sudan electricity interconnection project - 13/02/2025 20:48
- Rwandan peacekeepers in South Sudan get UN service medals for their service - 13/02/2025 20:44
- Afreximbank seeks to claw back US$657mn debt from South Sudan - 13/02/2025 20:30
Random articles (all categories):
- South Sudan, UN to immunize 144,000 against cholera - 17/11/2019 03:09
- The JCE: The Axis of Evil - Governing the country by proxy! - 25/02/2021 10:48
- South Sudan violence targets hospitals - 26/02/2014 13:29
- Sudan: Should Sundowns lose, there will be an almighty outcry from millions of Al Ahly fans - 18/03/2023 00:31
- Egypt, South Sudan mull boosting civil aviation cooperation - 27/02/2022 09:15
Popular articles:
- Who is the darkest person in the world, according to Guinness World Record? - 25/10/2022 02:34 - Read 72466 times
- No oil in troubled waters - 25/03/2014 15:02 - Read 22391 times
- School exam results in South Sudan show decline - 01/04/2012 17:58 - Read 21612 times
- Top 10 weakest currency exchange rates in Africa in 2023 - 19/07/2023 00:24 - Read 19469 times
- NDSU student from South Sudan receives scholarship - In-Forum - 29/09/2012 01:44 - Read 19253 times