One of the world’s last telecom markets is opening up, and that’s no news. But amidst the plans to liberalize the sector, Ethiopia’s mobile money service market part of the developments is being kept away from foreign firms interested.
Not long ago, East Africa’s most profitable company, Safaricom, was negotiating with the Ethiopian government to launch its mobile money service in the country.
But relations between the two African countries went up in flames when Ethiopia’s apex bank said only locally-owned non-financial institutions would be allowed to offer such services.
Being that Safaricom’s high-profile status was achieved mainly on the backs of Kenya’s M-PESA, there was much expectations regarding the telco’s ability to replicate the success in yet another country, one with more than 110 million people.
Consequently, only companies like Ethio Telecom, the government-owned monopoly, have the right to venture into Ethiopia’s mobile money services. Indeed, the National Bank of Ethiopia (NBE) has given the greenlight for the firm to go ahead with a launch.
Ethio Telecom is expected to use the mobile money platform to generate up to USD 13 Bn by 2025. But the service will be available to only Ethiopian nationals and Ethiopians in diaspora. The telco currently has a subscriber base of 46,2 million, which increased 5.8 percent from last year.
As can be learned from the mobile money gospel according to Kenya and Ghana, the sector is key for promoting financial inclusion. It won’t be surprising to see the sector drastically grow in Ethiopia, which has even a bigger, ready consumer market.
Since 2019, Ethio Telecom has been negotiating with the NBE to get a license for the service. Now that its efforts have yielded fruits, it adds to its wins and strive to remain the top dog in the country’s telecom sector.
Recently, Ethiopia restricted foreign telecom infrastructure companies from entering the nation as part of the liberalization process. The restriction was in favor of Ethio Telecom, who complained to the government that allowing foreign providers to enter would jeopardize their years of telecom infrastructure investments in the country.
Nevertheless, Ethio’s mobile money vertical will be watchdogged by NBE, not the Ethiopian Communications Authority, which is currently in the process of licensing two foreign telecom operators.
Featured Image: Square Space
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