Southern Sudan: Cell Licensing First,

UNCLAS SECTION 01 OF 02 KHARTOUM 000986 SIPDIS SIPDIS SENSITIVE E.O. 12958: N/A TAGS: PGOV ECPS ECON SU SUBJECT: Southern Sudan: Cell Licensing First, Questions Later REF: Khartoum 00634 ¶1. (SBU) SUMMARY: Under Secretary for Communications and Postal Services Elijah Biar Kuol told Acting Consul General Juba (A/CG) that the Government of Southern Sudan (GoSS) could no longer wait for a resolution in the fight over their right to issue telecommunication licenses (reftel). Kuol said that the National Telecommunications Commission (NTC) had not been cooperative, that Mobitel had not added capacity, and that the South could no longer afford to continue without basic communications. Therefore, it issued a license to the locally owned GemTel, which has now installed equipment in Juba and Yei, and which will start selling SIM cards in early May. Kuol expects a court challenge to this move, but believes the GoSS will win because of the "one country, two systems" established in the CPA. Kuol said the GoSS would accept whatever the court decides. END SUMMARY. -------------- Mobitel, NTC Non-Responsive -------------- ¶2. (SBU) Kuol explained that the NTC has licensed four telecommunications companies in Sudan, but only two -- Sudatel and Mobitel -- operate in the South. Sudatel is now exclusively a landline operator, so Mobitel is the only choice for cellular communications. Kuol said that the GoSS is happy with the service provided by Sudatel, and would not sell additional landline licenses. Mobitel, which has so far not been able to provide the reliable cellular service essential for growth in the South, claims that the issue is network capacity. They have not, however, moved to expand that capacity within the past year despite repeated requests from the GoSS. ¶3. (SBU) The GoSS had wanted to review the existing NTC licenses to see if they could compel the operators to improve service. Kuol reasoned that if a company, or set of companies, are given exclusive access to a market, their license should stipulate requirements for that market. NTC has refused to share the contract. -------------- Desperate Times... -------------- ¶4. (SBU) The GoSS has now decided to move ahead and license a cellular company itself for operations in the South, a move the NTC has called illegal. Kuol realizes issuing the new license before the issue is resolved is an extreme move, but he feels communications problems have become such a threat to development and the functioning of the government, that doing so is justified. ¶5. (SBU) The GoSS said it would continue to honor any licenses granted by the NTC before the signing of the CPA, so Mobitel is welcome to upgrade its equipment and remain. Kuol did indicate that if Mobitel sought to expand its business to new areas, this would be considered a new operation, and require a license from the GoSS -------------- Local Boys Make Good -------------- ¶6. (SBU) The company that has stepped in is called GemTel, which worked with the SPLM during the war. Kuol would not go into detail on the ownership or origins of the company, and only stated that it was a Southern Sudanese business that has worked with the SPLM for years and knew how to do business in the South. ¶7. (SBU) GemTel has spent the past two months installing and testing equipment in Juba and Yei. Kuol has tested its system and says that coverage is good throughout both cities. He says that there are a few technical difficulties to be worked out, and one dead spot in Juba to correct, but the company will be ready to start selling its SIM cards in May. It plans to have initially 10,000 subscribers, 5,000 each in the two cities. GemTel will then take these earnings and invest them in expanding capacity and establishing a new network in Malakal. GemTel plans to eventually offer coverage throughout the South. Kuol noted that the GoSS was able to make this progress despite U.S. sanctions which apply to many cell phone technologies. ¶8. (SBU) Because of the way in which GemTel has been KHARTOUM 00000986 002 OF 002 licensed, it is doubtful that it will b able to sign a roaming agreement to allow GemTel customers to use its phones in the north. They will, however, attempt to sign roaming agreements with all the surrounding countries, especially Kenya and Uganda. STEINFELD