Fading Promise

Ethiopia: MTN pullout shows financial-opening prospects receding

By David Whitehouse

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Posted on August 13, 2021 14:07

Plans by Ethiopia to add mobile financial services as a sweetener in the sale of its second telecom operator licence reportedly weren’t enough to persuade the first round’s only unsuccessful bidder, South Africa’s MTN, to have another try.

MTN, whose offer in the first round was rejected as being too low, had said it is ready to bid more if mobile financial services would be included. On August 12, CEO Ralph Mupita said being the third or fourth licensee makes it hard to compete in any market and that MTN will not take part. This month, Ethiopia will reopen bidding for the licence.

There is now “a huge risk that there won’t be any takers for the Ethiopian license,” says Ayobami Omole, African telecoms analyst at Tellimer in Lagos.

The absence of tower companies and the increasing competitiveness of state-owned telecoms operator Ethio Telecom are deterrents to entry, she says. “A third player will have a very tough time playing in the Ethiopian market, even with a mobile-money permit.”

Excitement around the opening of Ethiopia’s financial services sector, which was stoked in 2019 when Ethio Lease became the first

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