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Ethiopia Prepares To Issue New Telecoms License

By  |  May 24, 2023

The government of Ethiopia is set to launch a tender for a second international telecoms license. According to the country’s telecoms regulator, the Ethiopian Communications Authority (ECA), the offer will be officially made in June 2023.

In November 2022, the government disclosed it plans to issue another operator license, just after completing the process which saw a consortium led by Kenya’s Safaricom become the newest entrant in what had in the last several years remained a monopoly of state-owned Ethio Telecom.

Three months later, as part of efforts to liberalize the sector, it increased the amount of Ethio Telecom shareholding available for purchase from 40 to 45 percent. Denationalizing the 13-year-old mobile carrier was deemed necessary to make it more competitive and efficient for the awakening market.

“We have planned to launch the tender in June. More details will be released when we approach the launch date,” said Balcha Reba, director-general of the Ethiopian Communications Authority, in a statement to Reuters.

This May, the National Bank of Ethiopia (NBE) issued a mobile money license to Safaricom’s M-PESA, a service that has contributed majorly to elevating the company to Kenya’s leading telco and East Africa’s most valuable company. Before then, only Ethio Telecom’s Telebirr was operational.

When Ethiopia’s telecoms monopoly was ended in 2022, the country, which has Africa’s second-largest population after Nigeria, observed that the entry of Safaricom gave customers a choice between two services. The development inadvertently drove Ethio Telecom’s pricing down and its service quality up.

The telecoms sector is often referred to as the grand prize in Prime Minister Abiy Ahmed’s push to open up the Ethiopian economy and attract foreign investments. But these plans have been slowed down by conflicts in Northern Tigray and resulting internet censorship. As the reforms resume, expectations hoover high.

Home to more than 112 million people, the Horn of Africa nation has a massive market in dire need of disruption. As one of the world’s last frontier markets, the role of technology in its transformation will always be closely watched.

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