Ethiopia expects second telecoms operator to start in Q1 next year

Ethiopia expects its second telecoms provider to start operations in the first quarter of next year and is finalising preparations to issue it with a licence for mobile financial services, a senior government adviser said on Friday.

Kenya’s Safaricom, together with South Africa’s Vodacom, Britain’s Vodafone and Japan’s Sumitomo, paid $850 million for the operating licence earlier this year.

The consortium has just signed a deal with China’s Huawei for network infrastructure construction, Brook Taye, a senior finance ministry adviser, told an online conference.

The government is finalising legal changes to allow the central bank to issue Safaricom with a licence for mobile financial services, Brook said. The right to offer financial services had not been included in the initial licence.

The Horn-of-Africa nation is liberalising its telecoms sector in a bid to pivot to a modern, digital economy in line with reforms unveiled by Prime Minister Abiy Ahmed in 2018.

State monopoly Ethio Telecom, which launched a new mobile financial service called Telebirr in May, snagged 4 million users within weeks, showing the potential of the market.

A separate sale of a 40% stake in Ethio is ongoing, part of a drive to open up the sector and the broader economy.

Brook said the government’s intensifying conflict against rebellious Tigrayan forces and their allies was likely to impact the deal, without providing details, but expressed hope the situation could be resolved quickly.

“We know how to overcome,” he said of the military and political crisis. Reuters