The telecommunications and information technology sector in Yemen is a vital component of the country’s infrastructure and plays a critical role in economic growth. It is the second-largest source of public revenue after the petroleum sector, and contributes important work opportunities, whether directly or indirectly, through its connections to other sectors of the national economy.
From 2015 to 2019, the sector’s performance has varied due to the extraordinary circumstances Yemen has been going through. It is estimated that the conflict has caused about $4.1 billion in direct financial losses for the telecommunications sector due to electricity outages (at times caused by a lack of fuel), institutional fragmentation, and competing policies and financial demands by the authorities in Sana’a and Aden, as well as confiscation of assets and extortion. The sector has also lost a number of opportunities that may have otherwise been available if it were not for the outbreak of the conflict, like the development of licensing agreements and the progression to 4G technology. Investors in the telecommunications sector have been deterred from the Yemeni market despite its large size and the fact that many services are not currently being provided by the companies operating in the sector.
The sector faces a large number of challenges, the most serious of which are: the unsuitability of the legal and institutional regulatory environments; fragmentation of public entities in the sector; unproductive accusations made by the parties to the conflict; the lack of separation between political, regulatory and operational roles within the sector; and the reliance on a weak and fragile infrastructure to provide these services. Other challenges include the restrictions imposed on importing equipment, difficulty accessing a number of districts and entire governorates to carry out necessary repairs, declining revenues for the companies, and the increase of fees being levied by both the authorities in Sana’a and in Aden, compounded by the population’s general impoverishment and limited purchasing power.
To strengthen the role of Yemen’s telecommunications, there must be efforts in the short term to depoliticize the sector during the conflict, repair operator networks, introduce new services (such as video conferencing and digital financial services), and work to lower internet tariffs—this paper does not provide an analysis of how to achieve a viable mix of upgraded services and affordable prices while still maintaining the feasibility of new investments. In the medium and long term, efforts to draft new telecommunications laws must continue, in addition to separating regulatory and operational roles, developing the regulatory and institutional environment, encouraging private investment, and updating educational programs and university curricula to ensure that they are up-to-date with ongoing developments in the field of telecommunications and information technology. These curricula and programs must meet the local market’s needs for specialized labor.
