Gearing up

Ethiopia: Can Ethio Telecom survive Safaricom’s April assault?

By Fred Harter

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Posted on April 1, 2022 08:55

A woman walks past an Ethio Telecom office in Ethiopia’s capital Addis Ababa
A woman walks past an Ethio Telecom office in Ethiopia’s capital, Addis Ababa, November 9, 2015. REUTERS/Tiksa Negeri

Ethiopia’s giant state-owned telecoms provider – Ethio Telecom – faces the biggest challenge in its history. In April, its monopoly on phone and internet services will come to an end when Kenyan operator Safaricom launches its network. Can the local operator survive?

Opening up Ethiopia’s economy to private investment and competition has been a key part of Prime Minister Abiy Ahmed’s reform agenda. With a population of 110 million served by a single state provider, the country has had a largely untapped telecoms market.

In May 2021, Abiy’s government awarded the first ever private licence for telecoms services in the country to a consortium led by Safaricom, which paid $850m. The government had also put a second licence up for auction, but plans to sell it were shelved after the bids received were considered to be too low.

Plans to privatise 40% of Ethio Telecom have also stalled. In September 2021, companies were invited to submit proposals for the stake. However, in March 2022, the finance ministry said the privatisation process has been postponed amid the economic uncertainty stemming from the on-going civil war in the north. French company

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