Ethiopian Communications Authority (ECA), the country’s telecommunications regulatory body, is set to announce the winners of its bid to award two new telecom operator licenses, according to reliable sources.
Since the east African country began offering telecommunications services around a century ago, the state-owned enterprise now known as Ethio Telecom has been the sole telecom service provider in Ethiopia.
After the Authority issues the two new telecom operator licenses, the Ethiopian government intends to sell a 45 percent stake in Ethio Telecom.
A Look At Ethiopia’s Telecom Market
- Right now, the average rural inhabitant of Ethiopia has to walk 30 kilometers to the nearest phone. The ETC announced 7 September 2006 a program to improve national coverage and reduce the average distance to 5 kilometers. The ETC has also stated that the rural telecom access within 5 km radius service has currently reached 96 percent.
- Since 26 September 2017, it is not possible to buy and use Ethio Tel SIM cards in mobile devices that haven’t been purchased in Ethiopia or registered with the authorities.
- As of 2012, 20.524 million cellular phones and 797,500 mainline phones were in use.
- Use of voice over IP services such as Skype and Google Talk was prohibited by telecommunications legislation in 2002.
- In 2007, there were just 89 internet hosts. There were 447,300 internet users in 2009. In 2010, just 0.75 percent of the population was using the Internet, one of the lowest rates in the world.
- Telecommunications in Ethiopia is a monopoly in the control of Ethio Telecom, formerly the Ethiopian Telecommunications Corporation (ETC).
With the proposed new reforms, Ethiopia would be seeking to liberalize the country’s economy.
The government will expect the winning companies to start operations this year, initially using Ethio Telecom’s infrastructure to run their networks, the sources said.
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Ethiopia’s potential as an untapped market could outweigh concerns about any risks, including Ethiopians’ low-income levels and the country’s over-valued birr currency.
There are 31 countries in Africa where there is a state-owned incumbent telco that is either dominant or has monopoly privileges that hamper the growth and efficiency of the market.
Read also:Ethiopia Extends Deadline For New Telecoms Licence Applications Until April 26
These are: Algeria; Angola; Benin; Burundi, Cameroon, Central African Republic, Chad, Comoros, Congo-Brazzaville, DRC, Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Libya (which has several state entities), Mali, Mozambique, Namibia, Niger, Sao Tome, Sierra Leone, Swaziland, Tanzania, Zambia and Zimbabwe.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer