Ethio Telecom continues to veto any opening of the telecom industry to foreign operators.
Ethiopia is one of the last countries in Africa allowing its national telco, Ethio Telecom (ETC) a monopoly on all telecom services including fixed, mobile, internet and data communications. This monopolistic control has stifled innovation and retarded expansion. A recently expired management contract with France Telecom dramatically improved performance for ETC though there remain weaknesses in quality of service. Although the contract was considered a first step towards privatization and the introduction of competition, the government in 2013 again rejected calls to privatize the incumbent and allow market competition, citing the need for higher profits from the company to subsidies` an unrelated railway project.
Africa’s second most populous country has more than 60 million subscribers. That’s expected to grow to about 80 million by 2020. Foreign investors are eager to play a role with their own internal data suggesting 10 percent as an easily achievable growth figure, implying 100 million subscribers by 2020 as a reasonable figure.
The comparable statistic would be the DRC. But the difference maker here may be the Ethiopian government’s unmatched commitment to infrastructure investment on the continent in recent times. Public transportation and power may steal the conversation. But the country can be appreciated for its strong fixed-line system (gaining a new momentum in some countries) and its previous partnerships with foreign operators — China’s Huawei and ZTE as well as Sweden’s Ericsson. Expect one of those three to play a partnership role in a technology upgrade project, as planned by Ethio Telecom for 2016. Debate also rages on if more towers are needed, with Ethio Telecom holding firm that there are currently enough towers constructed in the country.
The country’s broadband market is also set for a boom following massive improvements in international bandwidth, national fibre backbone infrastructure and 3G mobile broadband services. After years of low uptake due to prohibitive pricing, retail prices are now comparable to other markets in the region that are already more developed.
Estimated market penetration rates in Ethiopia’s telecoms sector end-2014
| Market | Penetration Rate |
|---|---|
| Mobile | 34% |
| Fixed | 1.0% |
| Internet | 2.3% |
-
- BelCash Technology Solution partners with two banks to launch HelloCash mobile money service;
- Ethio Telecom launches LTE in Addis Ababa;
- Value-added services (VAS) licences issued;
- Ethio Telecom transforms under management contract with France Telecom/Orange;
- Strong revenue growth despite drastic price cuts;
- The fastest growing mobile market in Africa;
- Local handset manufacturing, including smartphones;
- International internet bandwidth has increased more than six-fold in two years;
- Significant improvements in broadband affordability;
- Broadband pricing comparison: ADSL, EV-DO, GPRS, HSDPA;
- Vodacom and MTS position themselves in anticipation of market liberalisation;
- Huawei and ZTE share a $1.6 billion contract to develop an LTE network and expand 3G nationally, Ericsson also brought in as network vendor in December 2014;
- Samsung planning computer equipment assembly plant;
- Huawei contracted to provide LTE infrastructure for the Addis Ababa Light Rail Transit project;
- Ethio Telecom extends telecom network access to over 16,000 of 18,000 settlements;
- Ethio Telecom project upgrade providing LTE to 400,000 in Addis Ababa;
- Forecasts for mobile and internet market to 2014 and 2017;
- MetEC begins delivery of smart meters to Ethiopian Electric Utility.Companies mentioned in this report:
- Ethio Telecom (Ethiopian Telecommunications Corporation, ETC); EthioNet (ETC); Ethio Mobile (ETC); France
Telecom, Tecno Telecom, Smadl, Tana Communication, Thuraya