Ethiopia Telecom and Internet Services
After decades where the state maintained a monopoly on the nation’s telecom and internet networks, the sector is ripe for development.
Since 2018, the government of Ethiopia has been taking steps to liberalize and privatize its industries, including that of the telecom sector. In 2019, it established the Ethiopian Communication Authority (ECA) with the function of issuing licenses for private telecom operators and overall sector regulation. Ethiopia’s telecom monopoly ended in 2021, when ECA awarded Safaricom Ethiopia the country’s first private sector operator license. Safaricom Ethiopia began operations the following year, claiming over 300,000 subscribers in its first few weeks. Safaricom Ethiopia started service first in smaller cities like Diredawa and Bahirdar is now expanding its network to the capital of Addis Ababa. On the heels of this successful liberalization, ECA officials have stated that a second operator license is expected to be tendered to an international private telecom operator in 2023
Beyond operating licenses, other opportunities are emerging within Ethiopia’s telecom sector, including mobile money, fintech and network towers. In 2021 Ethio Telecom, the state-owned mobile operator rolled out TeleBirr, its mobile money product. For the time being, only Ethio Telecom is permitted to provide mobile financial service. However, reports indicate that mobile payment systems will be allowed to private mobile operators, thus, it is expected that Safaricom Ethiopia will eventually introduce its popular M-Pesa mobile banking product once National Bank of Ethiopia approve its permit request. The second private operator would also be expected to receive similar permission. As competition in Ethiopia’s telecom sector ramps up, mobile penetration continues to rise, and mobile money integrates into Ethiopians’ everyday lives, opportunities for ancillary fintech services such as e-commerce, lending, transfers, and other mobile apps are similarly poised to grow.
Moreover, rising demand is necessitating the expansion of the country’s telecom infrastructure. To date, there are about 7,000 cell phone towers across Ethiopia, however, ECA estimates tower demand in excess of 9,000. CS Ethiopia learned that the government of Ethiopia is considering permitting private investors to build telecom towers in Ethiopia with a decision expected in early 2023.
The opening of Ethiopia’s Internet and Telecom sector offers key opportunities for innovative U.S. businesses. In particular, there is great potential for Fintech firms with experience supporting mobile financial services, and hi-tech tower building companies for IT-related infrastructure projects. CS Ethiopia will continue to monitor and report on opportunities relating to the opening up of the country’s telecommunications sector. For more information, please contact CS Ethiopia Commercial Specialist Teddy Tefera, Teddy.tefera@trade.gov.