Ethiopia looks for $2.2bn investment as it opens up telecoms to competition

Ethiopia looks for $2.2bn investment as it opens up telecoms to competition


Ethiopia will ask for tenders for new telecoms licences in September, with new competitors to Ethio Telecom to be announced before the end of 2019.

The country has decided on a fast process to introduce a competitive telecoms market, following the approval of a new law in early June.

Ethiopia is looking for $2.2 billion in investment to bring its telecoms infrastructure up to modern standards. With a population of an estimated 105 million, it is bigger than Egypt, but has a mobile penetration of only 60%.

State minister of finance Eyob Tekalign Tolina said last week that there is a huge need for investment in telecoms infrastructure. “We have said clearly that public investment has run out of steam. We are not going to do unsustainable public investment,” he told the Reuters news agency.

He told the agency that the country needs $2.2 billion in investment by the newcomers to build networks to compete with Ethio Telecom, until now the state-owned monopoly operator.

Telecoms has been one of the main targets for infrastructure modernisation since prime minister Abiy Ahmed (pictured) came into office in early 2018. Early this year the country announced plans for a national fibre network

Companies that have stated their interest in the Ethiopian market include MTN and Orange as well as Vodafone, which owns Safaricom, the biggest operator in neighbouring Kenya.

In a sign of how fast-moving the market is, Ethiopia’s parliament approved the establishment of a telecoms regulator only last week – but the next step is to set up the regulatory framework, staff the regulator and set out the terms and conditions for the new licences. And the new regulator must also decide how many competitors to license.

In his interview with Reuters the minister said the regulator must me an “independent authority” in order to “ensure a level playing field.”.

At the same time the government of Ethiopia is pursuing its plan to sell off a stake in Ethio Telecom, to bring in finance from outside the state.

Meanwhile the BBC reported on Sunday that Ethio Telecom has cut off SMS and other text messaging services, including Telegram. The country has given no explanation.

The UK broadcaster said that messaging blackouts began on Thursday last week, and that there have been some internet blackouts for even longer, since last Tuesday.  

The BBC said that internet access was restored in the capital, Addis Ababa, on Friday evening “but it has not been switched back on in many other towns”.


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