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ETHIOPIA’S TELECOM SECTOR TO BECOME COMPETITIVE

The Ethiopian government has announced that a tender for a new international telecoms license would be held in June. “More details will be released as we approach the launch date,” says Balcha Reba, director general of the Ethiopian Communication Authority (ECA).

Remember that Safaricom Ethiopia became the market’s first private telecom provider in October. It was also the company’s first expansion outside of its heartland, Kenya, where it has a stranglehold in the telecoms and mobile money industries.

Safaricom had three million users in the country as of March 2023. The telecom is currently present in 25 Ethiopian cities, serving 10% of the country’s 110 million people. According to the company, it has approximately 847 network nodes.

There are 754 permanent staff, 5,000 SIM card sales locations, and 28,000 airtime sales locations. However, the telco’s core earnings plummeted by a fifth in the fiscal year ending March 31, owing to the cost of establishing operations in Ethiopia, the company said on Thursday.

Regardless, Safaricom CEO Peter Ndegwa said the business aims to invest $300 million per year in Ethiopia over the next ten years, after previously investing $1.2 billion in the nation. Additionally, Safaricom got a license from the National Bank of Ethiopia earlier this month to expand its mobile money product M-Pesa in Ethiopia, making it the lone competitor to the state-owned mobile money provider, telebirr.

“Safaricom Ethiopia,” says Anwar Soussa, CEO of Safaricom Ethiopia, “provides services to more than 51 million customers across seven African countries with safe, secure, and affordable ways to send and receive money, top-up airtime, make bill payments, get short-term loans, and much more.”

As part of President Abiy Ahmed’s plan to open up the country’s economy as well as strengthen the digital economy, which has been hampered by the region’s civil war. The government recently announced plans to sell 45% of its telecom Ethio Telecom, up from 40% announced in November 2022.

The Ethiopian government claims that “low teledensity in Ethiopia highlights the enormous untapped potential in Ethiopia’s telecommunication sector.” and that Ethiopia Telecom’s “robust infrastructure combined with its strong financial performance will offer any investor a significant competitive advantage.”

Ethiopia has a population of about 112 million people, making it the second-most populous country in Africa. It is one of the world’s last countries to establish competition in the telecom business, a tough process that began in 2019 as part of the government’s Economic Reform Agenda, with help from the International Finance Corporation.

The reforms aim to create jobs, decrease poverty, and expand the local economy in a sustainable and equitable manner.

 

Gabriel Eleojo Umoru
Gabriel Eleojo Umoru
I'm Gabriel Eleojo Umoru, a graduate of Mass Communication from Prince Abubakar Audu University (formerly Kogi State University Anyigba, Kogi State). My hobbies include writing, surfing the internet and listening to music. I'm into voice editing and project management. I also help people out in their research projects.

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