Somalia is widely known as a volatile country whose coast is ruled by pirates, with constant internal population movement anda weak interim government threatened by rival militia associated with terrorists.Despite these problems, the Somali technology sector offers well-established services, including free fixed-line calls in Mogadishu, cheap mobile-phone calls, negligible costs of text messages and mobile money services that stretch across the Kenyan border.Computerworld Kenya (Our sister publication), spoke to Ahmed Yusuf, chairman and CEO of Hormuud Telecom, Somalia's largest telecommunications and services company, operating in the southern and central regions and along the Kenya and Ethiopia borders.

Computerworld: How would you describe the telecoms sector in Somalia?

Ahmed Yusuf: The sector is very tough; the political instability makes it hard to project on the growth of users. One day you can have subscribers, but the following day they could be gone.

The lack of a stable government means there is no regulation. There are four mobile-phone companies in the country and competition is stiff, which is good for subscribers because the costs remain low.

Computerworld: How many subscribers do you have in Somalia?

Yusuf: Because of the lack of proper structures, I can only tell the number of users we have in Hormuud Telecom; GSM [Global System for Mobile Communications] is 1.2 million and fixed line is 70,000 subscribers. The number is growing but also depends on the movement of people.

Computerworld: Somalia is said to have the best telecoms cost structure, how are the costs?

Yusuf: The cost structure is very suitable for consumers. Somalia has the cheapest rates in Africa: $ 0.35 for international calls local, $0.10 for mobile calls and $0.02 for text messages. Fixed-line calls within Mogadishu are free.

Hormuud offers bundled services for mobile and fixed line -- for $7 a month, users can make the free fixed-line calls.

Computerworld: How do you see the growth of fixed compared to GSM in Somalia?

Yusuf: In Somalia, fixed line cannot grow as much as GSM because of instability; people move from time to time and they cannot move with their fixed lines. In such cases, GSM grows at a better rate because people can shift with their handsets.

GSM services are growing at a faster pace; we have voice as well as data, which diversifies the revenue streams for the company and its agents. The services are available 60-70 kilometers into Kenya; people access the services even in Mandera district, a Kenyan border town.

Computerworld: How has the lack of a regulatory authority affected the sector?

Yusuf: Having a regulatory authority goes hand in hand with a stable government; if there is no stable government, then there will be no institutions that can support the various industries. Having a regulator is important because it leads to growth of other services sectors like banking, which requires connectivity. Yes, lack of regulation means that companies are free to set up services any time they like and charge whatever they like, but if I was to be given a choice, I think regulation is better.

Computerworld: Do the telecom companies engage in anticompetitive behavior?

Yusuf: We have four GSM companies and everybody does what they want. Some companies have entered into interconnection agreements, and there is common understanding among the players, but the companies can do what they want because there is no regulation. So, they offer the discounts they like. If they feel like lowering more, they do it and there is nothing the competition can do.

Computerworld: Piracy along the gulf of Aden in the Indian Ocean is said to have its added advantages because more money is being invested in the region. Has the Somalia telecoms sector benefited from that kind of money?

Yusuf: I am not a very good politician and I do not want to delve into politics, but piracy is a common problem. How many warships do you have patrolling the gulf of Aden? How come ships have not evaded the pirates?

There is a lot of politics but the money being invested in Kenya or Somalia is from genuine businessmen. The construction business in Eastleigh (Kenya's Somali town) is by known business people and there is no evidence of piracy money.

So in short, the technology sector has not benefitted from the piracy activities along the Somalia coast.