The Ethiopian government has announced plans to launch a tender for a new international telecommunications license in June. Balcha Reba, the director general of the Ethiopian Communication Authority (ECA), stated that more details will be released closer to the launch date.

Safaricom Ethiopia, which became the first private telecom operator in Ethiopia in October 2022, has already gained three million subscribers as of March 2023. Despite facing a decline in core earnings due to the costs associated with entering the Ethiopian market, Safaricom CEO Peter Ndegwa plans to invest $300 million annually over the next ten years, in addition to the $1.2 billion already invested.

Furthermore, Safaricom recently obtained a license from the National Bank of Ethiopia to expand its mobile money service, M-Pesa, in Ethiopia. This move positions Safaricom as the only competitor to the state-owned mobile money provider, telebirr.

The decision to open up the Ethiopian telecommunications market stems from President Abiy Ahmed's efforts to boost the country's economy and improve the digital sector. The government also intends to sell up to 45% of its stake in Ethio Telecom, up from the initial plan of 40%. The value of Ethio Telecom was estimated at around $1.5 billion in 2022, and the government hopes to raise $675 million from the share sale.

With a population of over 112 million, Ethiopia represents a significant untapped market for telecommunications services. The government's reform agenda, supported by the International Finance Corporation, aims to stimulate economic growth, create jobs, and reduce poverty in an inclusive and sustainable manner.

Read more on BenjaminDada