The Future of Telecommunications in Yemen: A Journey Towards Advancement Amidst Challenges

Sawt Al-Amal (Voice of Hope) – Hebah Mohammed

Amid the rapid developments in the world of digital technology, the telecommunications and information technology sector emerges as a fundamental pillar for progress and development in various fields in any country worldwide. For Yemen, which faces significant challenges on various fronts, hope remains pinned on this sector to serve as a gateway to a better future, contributing to economic growth and improving the quality of life for citizens.

Yemen is currently grappling with immense challenges, whether in terms of internal security or economic stability. Nevertheless, there is a strong commitment to enhancing and developing the telecommunications infrastructure to keep pace with global advancements, achieve comprehensive communication, and align with the overall digital transformation worldwide.

The Voice of Hope report sheds light on the future prospects of the telecommunications sector in Yemen, providing a comprehensive analysis of the current situation with a focus on the opportunities and challenges impacting its development, as well as the efforts made so far to meet the technological needs of the society.

Challenges & Future Opportunities

The telecommunications sector in Yemen faces significant challenges across various areas and is considered a fundamental cornerstone for achieving economic and social development. With the troubled economic, political, and security conditions, the telecommunications infrastructure suffers from a lack of investments, network collapses, and frequent disruptions.

Despite these challenges, the future of the telecommunications sector in Yemen holds promising opportunities. The government recognizes the sector’s importance in driving development and is working to strengthen and develop it, leveraging these opportunities to enhance the telecommunications infrastructure and make tangible progress.

According to a report by the International Growth Center (IGC) published in February 2023, the sector’s contribution to the economic output has seen continuous growth, averaging 7% between 2015 and 2018. Additionally, a significant number of jobs are directly or indirectly linked to the sector, with a substantial impact on public finances. The source also indicates that telecommunications revenues are likely to exceed $150 million annually.

The report added that the costs of communication services, especially the internet, are exorbitant, representing 10% of an individual’s monthly gross national income, much higher than United Nations’ target of 2% for affordable broadband services to be achieved by 2025.

The report pointed out “a combination of long-standing problems and new challenges related to the conflict, making the telecommunications market in Yemen one of the toughest and most perilous in the world for private companies, with multifaceted obstacles related to institutional, regulatory, economic, and political dimensions.”

The report also indicated potential future opportunities to launch and improve the sector in the coming years, acknowledging the immense structural challenges hindering the development of telecommunications in Yemen. Despite the immense structural challenges impeding the development of the sector, Yemen has a large market for communication services, especially high-speed internet, yet this high demand is not met with sufficient services, creating enormous potential to attract substantial investments from the private sector.

The report also emphasizes that addressing market risks and key challenges will open the door to greater private sector involvement in developing this sector, particularly in connecting satellite internet networks and community networks, and developing new financial technologies, such as mobile money transfers. Furthermore, partnerships between the public and private sectors are essential for delivering communication infrastructure across the country.

The Reality of Telecommunications in Yemen

Before envisioning the future of telecommunications in Yemen, it is necessary to review its current situation, understand the challenges it faces, especially in the current circumstances of the country, and build a comprehensive vision on which strategic plans for the development of this vital sector can be based, to overcome difficulties and imbalances.

The legal advisor, Abdulrahman Alzabib, emphasizes the importance of the telecommunications sector in Yemen, both in terms of service and economy. Telecommunications form the basis of infrastructure, providing communication for the Yemeni people within and outside the country, as well as offering various services to citizens, companies, public and private institutions, and investors. Private sector investment in the telecommunications sector in Yemen is crucial for enhancing the state’s resources with significant revenues from license fees, taxes, and other public resources. Transparency in its revenues and expenses could cover many public needs, as telecommunications services provide substantial amounts from both government institutions and private companies on a daily and continuous basis.

There are steps to enter the private sector in investing in the fixed telecommunications sector. One of the landline telecommunications companies attempted to invest in it, then stopped and collapsed. There were also plans for private companies to enter the Internet telecommunications sector, but the project was stopped and postponed. As a result, the private sector was limited to investing in the wireless telecommunications sector, particularly mobile services.

Enhancing Decentralization in the Telecommunications Sector

To analyze the key points that must be considered when envisioning the future of communications in Yemen, the focus should be on addressing the challenges facing the sector. These challenges include lack of investments, network collapses and frequent interruptions. Additionally, it is important to enhance transparency in the revenues and expenses of communication services and to develop strategic plans for the sector’s growth.

Improving the services provided is crucial, and private sector participation plays a significant role in developing the communications sector. Furthermore, it’s necessary to benefit from global developments in the field of communications and information technologies.

Only then, Yemen can achieve a qualitative leap in the communications sector and become a model to be emulated in the region. This requires concerted efforts from all relevant parties, including the government, the private sector, and civil society. Regarding the legal system regulating communications in Yemen, Alzabib says: “Communications in Yemen are regulated by Law No. 38 of 1991, as amended by Law No. 33 of 1996 regarding wired and wireless communications, in addition to the regulatory regulations. Upon reviewing the texts of the mentioned law, we notice that most of the sector’s powers have been restricted to the Minister of Communications, which has reinforced the centralization of the communications sector in the capital, which is considered the most important weakness. It was supposed to enhance decentralization in this important sector and distribute the powers of the Minister of Communications to government communications institutions and their branches in the rest of the governorates.”

A Forward-looking Investment Vision for a Promising Future

Journalist Majid Al-Daa’ri, a researcher and expert in economic affairs, says: “Despite the lack of basic infrastructure and the challenges of conflict, the telecommunications sector in Yemen shows enormous potential for achieving huge profits, competing with future returns from the oil sector, if political settlement succeeds and serious government plans are found to encourage investment in this important field.

He emphasized that no country can achieve real progress without focusing on the development of the telecommunications sector and internet service systems, to enable other sectors to benefit from all the advantages of modern technological developments worldwide. Investment in the telecommunications sector is essential to improve the Yemeni economy as a whole, as it represents a nerve center for the economy and a backbone for other investments.

Solutions for the Challenges

According to economic analysis, investing in this sector can lead to the creation of new job opportunities for Yemeni youth, contributing to reducing unemployment and increasing state revenues through taxes and fees imposed on telecommunications companies. It also helps improve basic services such as education and health through the use of modern communication technologies and attracts foreign investments.

Al-Daa’ri pointed out that investment in the telecommunications sector in Yemen is still lagging, and Yemen still needs competitive projects in this sector, whether through telecommunications and information technology companies, or local intermediaries, to provide services directly to citizens due to the increasing daily need for communication from citizens and various institutions.

He emphasized that investment in the telecommunications sector in Yemen is full of opportunities, and also requires intensifying projects in this sector. If achieved, Yemen can benefit from telecommunications, providing important and easy smart opportunities for other sectors alike.

Al-Daa’ri also presents some necessary steps to achieve future opportunities and translate them into reality by stating: “The relevant authorities must establish a general investment environment, encourage private companies in the telecommunications sector, simplify administrative procedures, and direct the large government, including protecting property rights and contracts, and increasing facilities for startups and investors.”

He continues, “The government should work on improving the confidentiality of communications in Yemen, including developing diverse communication networks, enhancing the quality of email services, increasing internet speed, and making significant investments in updating information technology and information, including providing high-speed communication networks with 5G technology.”

Legal advisor Abdulrahman Alzabib shares his opinion, pointing out that the future vision of the telecommunications sector in Yemen will not be realized without addressing the existing imbalances. Immediate action is needed to eliminate the existing centralization in the sector, activate the powers of telecommunications institutions’ branches in the governorates, enhance these powers through legal amendments as a first step, and grant wide powers to government telecommunications institutions in managing communications in the governorates.

Advisor Abdulrahman Alzabib presents a revolutionary vision for the future of the telecommunications sector in Yemen, focusing on enhancing competitiveness and comprehensive transparency in the revenues of both government and private telecommunications services, improving services, reducing prices, activating positive competition in managing communications in the governorates, as well as activating the role of official oversight bodies in monitoring the telecommunications sector and its resources and expenses in all governorates. Any corruption cases should be referred to the Anti-Corruption Commission for investigation, and the corrupt individuals should be promptly prosecuted, and the misappropriated public funds should be recovered.

He also emphasizes the need to review public revenues and expenses for the telecommunications sector and ensure their transparent disclosure, as well as ensure that public expenses are within a reasonable framework and in line with priorities that serve and enhance the role of the sector and introduce modern communication services without delay.

Al-Zabib believes that the future of telecommunications in Yemen will witness a new transformative phase if local communication networks are reconnected, connected to international communication gateways, if international communication and internet cables are restored, and if Yemen is connected to multiple communication cables, which will improve the quality of communication services and positively reduce their cost.

According to World Bank’s 2020 Continuous Needs Assessment reports in Yemen, it is essential that priority interventions not only integrate investment in infrastructure but also enhance the legal and regulatory framework. This, in turn, will create a conducive environment for a competitive and adaptable telecommunications market.

The assessment further explains that the prosperity of both wired and wireless telecommunications markets inherently depends on increasing connectivity among people rather than their division. Therefore, the strength and flexibility of any national telecommunications network rely on open access across geographical and organizational areas. Once achieved, value-added services such as mobile money transfers and banking services will support a better future for communications in Yemen.