What now for South Sudan’s telecoms? Zain Sudan in license talks with new nation

Telecoms carrier Zain Sudan is in talks with South Sudan to pay a fee to extend its Sudan license to the newly independent country, the firm’s managing director said.

South Sudan seceded from the north on Saturday, the culmination of a 2005 peace deal that ended decades of civil war.

Zain Sudan, a unit of Kuwait’s Zain and one of three mobile telecoms carriers licensed from Khartoum, will continue to operate in the South as usual until new license fees are agreed, managing director Elfatih Erwa told Reuters.

Mr. Erwa ruled out asking north Sudan to refund some its estimated 200 million euros license fee to offset the cost. The firm will split its Sudan operations after South Sudan obtains an international dialing code.

Zain Sudan’s 57 percent mobile market share generated revenues of $273 million in the first quarter - almost a quarter of Zain group’s total - but just six percent of this came from the South. The carrier had 10.7 million Sudan subscribers on March 31, up 21 percent from a year earlier.

Only one million of South Sudan’s estimated 8 million people have mobile phones, but this will likely treble within two years, Mr. Erwa said.

South Sudan is considered one of the world’s least-developed nations. The territory is about the size of France but is estimated by some officials to have just 50 km of paved roads.

Government revenues are derived almost entirely from oil.
Zain is gearing up to expand 3G services in the South, investing nearly $110 million in fiber and its core network in 2011, while it has invested $1.2 billion in the past three years in Sudan as a whole.

“Our network in the south is larger than the other operators combined,” added Mr. Erwa. “We are now ready to roll out a fiber network to the Red Sea - we already offer 3G services in the South, but internet access is currently via satellite and so capacity is limited. This will be improved dramatically when the fiber network is built.”

South Africa’s MTN has an estimated 19 percent share of Sudan’s mobile market and Sudatel’s Sudani has 24 percent.