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Mobile Communications in Sierra Leone

Survey findings and statistics provided by the International Telecommunication Union (ITU) show that mobile telephony is the second most accessed media or communication device in Sierra Leone behind radio. From 2003 to 2008, the number of mobile phone subscribers in Sierra Leone grew nearly grew 10 fold, according to the ITU. The ITU estimates that there were only about 113,000 mobile subscribers in 2003 but by the end of 2008 Sierra Leone possessed a little over 1 million. With this large increase in access mobile phone subscribers outnumber fixed line subscribers 32 to 1.[1]

In the 2008 household survey, around 40 percent of respondents said they have household access to a mobile phone. This percentage, while high compared to other estimates (ITU estimates 18.14 percent), hints at not only wider use beyond official statements but also the widespread habit of mobile phone sharing. It is often the case in poor communities that households share access to more expensive items such as mobile phones.

Income seems to be the strongest factor in regards to mobile phone access, as Chart 1 depicts. However, there does not seem to be much of an age gap in mobile phone access, unlike in many other countries. Access in Sierra Leone is spread evenly across all age groups, ranging from 38 percent among those 45 and older to 42 percent among those 25 to 44. In addition, there is little difference in access between genders, with 42 percent of men and 39 percent of women reporting household access.

Chart 1

Fueling this growth in the mobile phone market has been the government’s privatization efforts in the telephony market and its use of regulation to keep tariff prices down. The government began to open the country's mobile market to private competition in 2001, licensing operators Celltel (Zain) in 2001 and Millicom (Tigo) in 2002. Two other operators were added thereafter in 2005, Lintel (Africell) in February and Comium in March. A fifth provider, Ambitel Limited, was poised to begin operations in March 2010. The mobile phone market is regulated by the National Telecommunications Commission (NATCOM), with its powers laid out in the Telecommunications Act of 2006. [2]

The International Telecommunication Union describes the mobile phone market as “partially competitive”. This is due in part to the fact that tariff price increases must be approved by the National Telecommunications Commission (NATCOM). According to Section 52 of the Telecommunications Act of 2006, mobile operators are required to notify NATCOM before raising tariff prices. Section 53 stipulates that it is only NATCOM that can approve such tariff increases.

In a recent example from January 2010, NATCOM fined the mobile operators Africell and Zain for raising the cost of their top-up cards without consulting NATCOM. Both Africell and Zain cited the recent introduction of the Goods and Service Tax on 1 January 2010 for the sudden increase of 50 unit and 100 unit top-up cards. The 50-unit card price was increased from LE1700 to LE2000 and the 100-unit card from LE3400 to LE4000. This sudden spike in the cost of mobile phone use caused a major disruption in the market, with many subscribers unable to purchase cards they normally would. [3]

This is just one example of the struggles NATCOM has had in effectively communicating and enforcing regulations. In the spring of 2009, mobile operators raised tariff rates without notifying NATCOM, citing recent changes in currency exchange rates. Within days of the rate increase, an emergency meeting was called between NATCOM and the mobile operators, who agreed to reverse the price increase. In addition, the parties agreed to negotiate a pricing formula that would account for future exchange rate fluctuations. [4]

Mobile money and mobile banking services have only just emerged in Sierra Leone. It was only in the fall of 2009 that Splash, a third-party mobile money service provider, began its pilot project. By January 2010, Splash began offering the service nationwide. Unlike most mobile banking services Splash is not operated directly by a mobile phone service provider. Splash has made agreements with three major mobile service providers allowing them to offer its service to about 90 percent of subscribers. As a third-party service provider, Splash is better able to converge on a very fragmented but small mobile phone market. As of Splash’s announcement of nation-wide service they had signed up over 12,000 users. [5]

Zain’s Zap service debuted in January 2010 and competes with Splash. The launch of Zap, which is operated in partnership with Sierra Leone’s Zenith bank, was also launched in Malawi and Niger, giving Zain a presence in six African countries. It remains to be seen whether Splash can compete with a company that has gained more than a combined 10 million users over the past year in Kenya, Tanzania and Uganda.

[1] “Mobile Cellular Subscriptions”. ICT Statistics Database. International Telecommunication Union. Geneva, Switzerland. Accessed January 2010. http://www.itu.int/ITU-D/icteye/Reporting/ShowReportFrame.aspx?ReportName=/WTI/CellularSubscribersPublic&RP_intYear=2008&RP_intLanguageID=1.

[2] “Functions”. National Telecommunications Commission. Freetown, Sierra Leone. Accessed January 2010. http://www.natcomsl.com/natcom/functions.htm.

[3] Ogundeji, Olusegun Abolaji. “New tax leads to call card hoarding in Sierra Leone”. Computer World Kenya. 11 January 2010. Accessed January 2010. http://www.computerworld.co.ke/articles/2010/01/11/new-tax-leads-call-card-hoarding-sierra-leone.

[4] Tarawallie, Ibrahim. “GSM Operators Comply With Natcom”. Concord Times. 9 April 2009. Freetown, Sierra Leone. Posted by allafrica.com Accessed January 2010. http://allafrica.com/stories/200904080866.html.

[5] Leishman, Paul. “A Closer look at ‘Splash’ in Sierra Leone”. GSMA: Mobile Money for the Unbanked. 30 November 2009. Accessed January 2010. http://mmublog.org/africa-west/a-closer-look-at-%E2%80%98splash%E2%80%99-in-sierra-leone/. And Turray, Aruna. “In Sierra Leone, Splash Mobile Money Transfer Goes National”. Awareness Times. 15 January 2010. Accessed January 2010. http://www.news.sl/drwebsite/publish/article_200514247.shtml.