Yemeni Telecommunications Sector: Disappointments and Persistent Aspirations

Sawt Al-Amal (Voice of Hope) – Afrah Borji

Yemen’s telecommunications and information technology sector is one of the most important revenue-generating service sectors contributing to the growth of Yemen’s economic output, which suffers from divisions in sources of authority that have affected the organizational work in the institutional sector due to the ongoing conflict. Despite this, Yemen still has a growing market for telecommunications services, especially internet service, as there has been a noticeable and influential improvement in the reality of society through the issuance of the fourth generation (4G) and work on its development.

In this regard, Engineer Ahmad Al-Rumaitha indicated that the telecommunications and information technology sector in Yemen is one of the main pillars of national economic growth and one of the most important sources of revenue for the state after the oil sector and other sectors and contributes to providing several important job opportunities through its association with other sectors in the state. However, the sector is centered around the economic conflict with the continuation of the current conflict and suffers from many technical problems and difficulties that threaten it with collapse.

A Reality that Looks Forward to Hope

Telecommunications and information technology services in Yemen are witnessing a deterioration in many Yemeni governorates as a result of the repercussions of the conflict. According to recent economic estimates, the telecommunications sector in Yemen has lost about 4.1 billion dollars since the outbreak of the conflict in 2015. It has also incurred heavy losses due to the unavailability of fuel for stations affiliated with the sector in many governorates, the impact of institutional divisions on organizational work, in addition to the confiscation of assets by the parties to the conflict in Yemen.

Al-Rumaitha confirms that the reality of the Yemeni telecommunications companies’ sector has recently become difficult, as it suffers from technical problems most of the time, as a result of the divisions that have occurred in providing the service in many Yemeni governorates, and the focus of the parties to the conflict on the financial returns that it reaps by controlling the regulatory and institutional matters in the sector completely.

He added that one of the challenges facing the sector is the aversion of investors working in the telecommunications and information sector as a result of the conflict and the control of the parties over coordination matters in imposing complex conditions and procedures.

Yemen is fertile ground for investment and investors in various sectors, including economic, tourism, commercial, and agricultural sectors. It enjoys global advantages and opportunities, but it suffers from a weak infrastructure, which is one of the priorities of investment work in the country. This includes the telecommunications and information sector, which is a major factor in economic development. Unfortunately, its infrastructure has been greatly damaged in areas such as Al-Hodeidah, Sa’ada, and other governorates due to sabotage in the telecommunications sector.

The Reality of the Organizational Structure of the Telecommunications Sector

According to an economic study entitled “The Effects of Conflict on the Telecommunications Sector in Yemen,” the regulatory and institutional environment for the telecommunications and information sector in Yemen is still irregular due to overlaps in business. This includes information technology with its various components, mobile phone services, landline telephone services, the Internet, and mail. The ministry is also supposed to work within the laws set by the government to regulate the telecommunications sector and implement them in a way that primarily serves the sector and the citizens.

The study also reviewed the Yemeni Telecommunications Law No. 38 of 1991 and its amendments by Law No. 33 of 1996, which represents the only legislation regulating the telecommunications sector in Yemen in all its related aspects. However, it no longer represents a comprehensive legal reference for mobile phone and internet companies and their services in Yemen.

Economic studies and reports confirm that with the increasing investment and operating costs of mobile phone companies, the Yemeni government should adopt a set of structural reforms and enhance the role of the private sector in economic life. Additionally, there should be efforts to empower joint work to reduce the role of the state in economic life, in order to encourage investment in the telecommunications and information technology sector.

Impact of the Conflict on the Telecommunications Sector

According to estimates issued by the Ministry of Communications and Information Technology in Sanaa, the total material losses incurred by the telecommunications and postal sector during the conflict period in Yemen until March 2020 amounted to a total of $4.1 billion. These losses represent the destruction of the infrastructure of the telecommunications sector, including facilities, towers and communication stations.

Some other sources estimated in March 2019 that about 200 stations out of a total of 850 stations of Yemen Mobile alone had stopped due to the conflict, in addition to many of the material losses suffered by companies operating in communications due to institutional division and dual policies.

The overall disruptions affecting the operations of mobile phone companies operating in Yemen warn of the seriousness of the situation in the telecommunications sector. They suffer from technical and operational problems that threaten collapse, despite their importance and limited technical capabilities. These companies have faced challenges in sustaining operations over the past years up to the present day.

Challenges Facing the Telecommunications Sector

Over the years of conflict in Yemen, the telecommunications and information technology sector has been one of the most important sources of power for most of the parties to the conflict. Financially, logistically, and in terms of security, it plays a crucial role. It constitutes the most important financial resources in the state, generating substantial revenues through internet and telecommunications servicews services, taxes on profits from public and private telecommunications companies, zakat taxes, and licensing fees for companies.

Engineer Ahmed identified several challenges facing the telecommunications sector in Yemen. He highlighted the lack of compatibility between the legal and institutional framework regulating the telecommunications sector, exacerbated by the exchange of accusations between the conflicting parties. Additionally, there’s a lack of separation between political, regulatory, and operational roles within the sector, resulting in interference in private companies’ affairs and unfair competition. This situation has led to the deterioration of the telecommunications sector in Yemen.

Furthermore, reliance on a weak infrastructure, encompassing electricity and telecommunications networks, as well as roads and ports, poses significant difficulties for the private sector in accessing essential services for project operations. Financial resource scarcity is another issue, with many investors lacking the means to invest in modern technologies and improved infrastructure. Import bans on necessary equipment and materials, along with challenges in reaching certain districts and governorates for repairs, further compound the sector’s challenges.

Solutions

Many economic experts believe that implementing a realistic and long-term reform program is crucial for improving the telecommunications and information technology sector. This includes supporting the participation of the private sector in its development and focusing on restoring the ability to connect local and international telecommunications networks.

Additionally, adopting a modern and independent regulatory framework can encourage private sector investment and enhance competition in the local market. It is also important to work on developing a comprehensive strategy for digital development in the future.

Engineer Ahmad Al-Rumaitha pointed out the most important treatments that contribute to addressing the difficulties facing the telecommunications sector. In the short term, he emphasized the need to make more efforts to neutralize the sector from the current political and military conflicts, which have caused widespread destruction. Additionally, upgrading all operators to communications networks and introducing new services such as visual communications and digital financial services, like a national digital wallet, are essential.

Furthermore, efforts should be made to reduce internet prices, which are currently astronomical and excessively high compared to global standards.

He added that there are many proposed solutions to address the challenges. These include revising the telecommunications law and separating regulatory and operational roles, updating university institutions and curricula to keep pace with developments in the field of communications and information technology, meeting the labor market’s need for specialized workers. Furthermore, a logical analysis of projects from all financial, temporal, and other aspects is necessary. The authorities must implement all proposed solutions so that the Yemeni telecommunications and information technology sector can emerge positively within Yemeni society.