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Somalia:Terrorist Financing, Money Laundering, Fraud & Inflation Mobile Money.

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Thursday October 10, 2019 - 23:53:32 in Latest News by Super Admin
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    Somalia:Terrorist Financing, Money Laundering, Fraud & Inflation Mobile Money.

    1.Three companies dominate the entire telecommunication industry across Somalia especially the GSM sector. They are Somaliland Telesom(Telesom Company), Puntland Golis (Golis Tele-com), and SC Somalia's Hormuud (Hormuud Telecom). Each individual

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1.Three companies dominate the entire telecommunication industry across Somalia especially the GSM sector. They are Somaliland Telesom(Telesom Company), Puntland Golis (Golis Tele-com), and SC Somalia's Hormuud (Hormuud Telecom). Each individual company is specifically dominant in its geographic area of operations.
2.There are numerous previous studies which re-port an inaccurate statistics about what the percentage of subscribers connected to these companies is or accounts for. For example, one study indicates that 85% of subscribers is connected to Telesom implying that the balance(15%) is connected to its competitors. Such statistics are not correct.3.
 
In Somalia, Mobile Network Operators (MNO)do not connect to each other (except Telesom,Golis and Hormuud), which limits subscribers’ ability to make calls or send SMS across differ-ent operators’ networks. This led even competitors’ employees and managers to use Telesom mobile in order to be able to make calls to the larger population. The same also goes for its sister companies– Golis and Hormuud competitors use their services thereby making the percentage of subscribers connected to each of Telesom, Hormuud, and Golis to account for100%. In other words, 100% of GSM subscribers in Somaliland is connected to Telesom Company while 100% of GSM subscribers in Puntland is connected to Golis Telecom and100% of subscribers in SC Somalia who are Somali nationals is connected to Hormuud Tele-com.
 
4.This does not mean that they control 100 per-cent of the market share as "subscription rate”should not be confused with "market share”. In Somaliland for instance, it is estimated that for every one hundred subscribers, ten are connected to both Telesom and SomTel while nine-ty are connected to Telesom only. In other words, for every 100 subscribers, all 100 of them are connected to Telesom but 10 of them are also connected to SomTel. Hence, Telesom Company shares GSM revenues with SomTel and with the other competitors as well there by making its market share to be less than 100%.5.
 
And the same goes for SC Somalia and Puntland telecoms. Many subscribers are connected to more than one operator i.e. many are connected to both Hormuud and Nationlink or Golisand Nationlink. Never theles it is believed that such alternative operators obtain small share of the revenues from telecommunication industry across all regions compared to Telesom, Golis and Hormuud with each reportedly receiving 85percent or more of the total revenues fromGSM subscribers in their local markets.


Who owns leading telecoms in Somalia?
 
6.The foregoing discussion is meant to give you a clear picture of their domination in their industry. Needless to say, these companies also dominate many other industries outside of the telecommunication industry. For instance, Hormuud Telecom owns SomGas (the sole distributor of household gas in SC Somalia and probably across the country), Hormuud University and many other businesses which are dominant in their separate industries. At this point I am not interested to continue discussing how successful or how influential are Somalia’s three leading telecom companies; rather, I would shift my attention into the ownership of these companies
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 the fact that Mr. Ahmed Nur A.Jimale is the largest shareholder of each of Telesom, Golis and Hormuud telecoms . Mr. Jimale was the owner and former CEO of Al Barakat Money Transfer Company which was established in 1986 but which became popular after the collapse of the Somali state in 1991 when in the absence of a formal banking system money transfer businesses, known as Hawala, had become the only way for diaspora Somalis to send money back to home for their families and close relatives.
 
7.In 2001 (few months before Sep 11), Al-Barakat Money Transfer Company has expand-ed vertically and launched a new telecommunication company called Al-Barakat Telecom Ltd.to exploit the previously untapped Mobile Network Operation industry in Somalia. Suddenly, it took control over the telecommunication markets in Somaliland, Puntland, and the South and Central Somalia by supplying the country with GSM services, fixed line telephone and internet services.
 
8.Shortly before September 11 attacks, the par-ent company, Al-Barakat Money Transfer, was accused by the United States of channeling
Introduction
 
 The Dark Side of Al-Barakat Mobile Money Services
 
funds to Al Qaeda terrorist network and follow-ing September 11 attacks, US authorities shutdown its Bank's overseas money transfer channel, froze its monies and listed the Company asa terrorist entity. Although in 2009 the Company’s Swedish branch has been removed from the terrorist list, it nevertheless remained inUnited Nations’ list of terrorist organizations until Feb 2012.
 
9.The newly established telecommunication segment (Al-Barakat Telecom) however not only survived during the initial shutdown of its par-ent company (Al-Barakat’s money remittance channel) but also thrived throughout 2001.Hence, Mr. Jimale got first hand experience of the importance of diversification as an effective tool to minimize investment risks. Because Al-Barakat Telecom survived when Al-Barakat Money Transfer Company was shut down and its assets frozen, he realized that had he not channeled significant amounts of Al-Barakat Money Transfer’s funds to the investment in Al
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Barakat Telecom, he would have lost every-thing. In other words, Mr. Jimale learnt that the expression, "Do not put all your eggs in one basket 
” has practical business applications, so if it worked for him once why not it work for him again. He immediately split Al-Barakat Telecom into three allegedly separate companies.Not only that, but he also eliminated the company name, "Al-Barakat” from his business world.
How Al Barakat Telecom evolved into three companies (Telesom, Golis and Hormuud)?
 
10.Because it was too risky to maintain the company name, AlBarakat Telecom Ltd., the surviving segment had to be renamed before it too attracts US government’s attention. In 2002, Al-Barakat Telecom Company underwent major restructuring. The old strategy, "Do not put allyour eggs in one basket ” was once more put in to practice and the company has been split into three business segments based on three distinctive geographic locations Somaliland,Puntland and SC Somalia with Somaliland seg-ment renamed "Telesom Company ”, Puntland segment renamed "Golis Telecom” and SC Somalia segment renamed "Hormuud Telecom
”.11.The only motive behind restructuring the company was to dissociate Al -Barakat Telcom from Al-Barakat Money Transfer thereby diverting USA and UN attention from the survived segment while also minimizing company specific risks through forged diversification. Nothing a tall is secret about the company’s ownership or motives behind its restructuring. In Puntland and Somaliland, everyone of the age of 25 year or older will tell you that Telesom, Golis and Hormuud are not new telecoms but three segments of Al-barakaat Telecom.
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Barakat Telecom.to more than one operator i.e. many are connected to both Hormuud and Nationlink or Golis and Nationlink. Never the les it is believed that such alternative operators obtain small share of the revenues from telecommunication industry across all regions compared to Telesom, Golis and Hormuud with each reportedly receiving 85percent or more of the total revenues fromGSM subscribers in their local markets.
For my safety
, I cannot disclose my identity but you can reach me on
. I promise to you that I will be responsive to your questions. Sorry for any inconveniences caused by my anonymity.
Source: academia.edu


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