THE Ethiopian Telecommunication Authority (ECA) has turned down nearly $500 million after the government decided to exclude mobile money from the terms of two new telecommunications licences.
‘This decision has cost us a high price,’ says Abiy Ahmed, Prime Minister of Ethiopia. ‘When it was decided to open up the telecoms market about two years ago, one of the key areas of contention was the issue of mobile money.’
This decision is expected to give the country time to develop its own mobile-money platform. Bloomberg Intelligence analyst, John Davies says, ‘Though Ethiopian mobile penetration lags behind peers, investment and lowered prices should lead to strong growth in take-up of mobile services. The value to international investors depends on agreements with the government and how it chooses to regulate the market.’
MTN Group has reportedly made a bid for an Ethiopian telecommunications licence alongside Vodacom Group and Safaricom. Finance ministry adviser, Brook Taye says that the consortium of bids is led by Safaricom.
‘We always wanted quality providers and this is what we have received,’ adds Taye. ‘These are two African giants — the Safaricom-led consortium and MTN — either one or two of the operators will get a licence in Ethiopia.’
Kenya’s geographical proximity to Ethiopia is expected to be one reason why Safaricom leads the consortium.
In an interview with Daily Nation, Peter Ndegwa, CEO of Safaricom, states that he would continue to pursue ways to introduce the company’s data, M-PESA and geographical expansion to Ethiopia as part of his strategy to take the Africa-wide telecom to the next level of growth.