For years, Ethiopia’s telecommunications sector has been dominated by Ethiotel, the state-owned operator that held a monopoly over the market. However, the status quo is set to change as the government moves to open the market to private players.
Ethiopia, with its population of 112 million and a GDP of $96 billion, is considered one of the last untouched opportunities for telecommunications in Africa. Recognizing the potential, Prime Minister Abiy Ahmed initiated reforms to attract private investors into the sector, a significant step in liberalizing the economy.
The Ethiopian Communications Authority (ECA) has already started the process by inviting bids for two telecom licenses. Out of the 12 international companies that initially expressed interest—including industry giants like Safaricom, MTN, Orange, and Etisalat—six have advanced to the next stage. These shortlisted firms are expected to submit technical proposals by April 5, 2021.
While the ECA has yet to reveal the names of all the contenders, Safaricom confirmed its inclusion in the shortlist through a press release. The names of the remaining five are anticipated to be announced soon.
Despite the promise of a vast market, potential challenges loom. A notable concern is the Ethiopian government’s history of internet shutdowns, often used to stifle political dissent. For instance, the internet was blocked for eight days in July 2020 following the assassination of Hachalu Hundessa, a prominent activist and musician.
Although such disruptions may create uncertainty, they do not seem to deter the telecom giants. Analysts argue that while these issues highlight the unpredictability of Ethiopia’s socio-political environment, the long-term market potential outweighs the risks. This optimism is fueled by the growing importance of data revenue in Africa, as evidenced by Airtel’s recent financial report, which showed a 24.4% increase in data income.
As Ethiopia prepares to welcome its first private telecom operators, the competition promises to transform the sector. It remains to be seen how Ethiotel will adapt to the arrival of new players and what this means for the country’s digital future.
