Consortium including UK’s Vodafone and CDC Group awarded telecom licence

24 May 2021

Historic move will see over $8 billion invested – the largest FDI into Ethiopia

On 22 May, Ethiopia awarded a telecoms operating licence to the Global Partnership for Ethiopia – a private consortium comprising of UK’s Vodafone Group and CDC Group, Kenya’s Safaricom, South Africa’s Vodacom Group, USA’s Development Finance Cooperation, and Japan’s Sumitomo Corporation.

This historic announcement forms part of the government’s plans to liberalise the economy and allow foreign and private investors into key state-owned companies, as part of the Homegrown Economic Reform Agenda.

“Today marks a decisive day for our economic reform path in Ethiopia,” Finance Minister, Ahmed Shide said. “With the liberalisation of the telecom market through a fair and transparent process, the government is enabling every Ethiopian access to quality services at an affordable price.”

The consortium plans to invest over $8 billion over the next ten years, creating up to 1.5 million jobs.

Reacting to the news, Prime Minister Abiy said, in a Twitter post, “With over $8 billion total investment, this will be the single largest FDI into Ethiopia to date…Our desire to take Ethiopia fully digital is on track. I would like to thank all that have taken part in this and for pulling off a very transparent and effective process!”

The Director-General of the Ethiopian Communications Authority, Eng. Balcha Reba said, “This decision ushers in a new era of telecom service development in our country which will benefit millions of Ethiopia to have access to quality and reliable communications services.”

According to Brook Taye, a senior adviser at the Ministry of Finance added that the consortium will provide 4G and 5G internet services, and by 2023 a low-orbit satellite will be put in place to provide nationwide 4G coverage.

Ethiopia’s telecoms industry is considered a big prize given the country’s population of 110 million people and potential for data services.

The selection of the consortium completes a transparent process that began in October 2020 to open Ethiopia’s telecom market to operators beyond Ethio telecom. At the end of April 2021, the Ethiopian Communication Authority announced that it had received two bids from South Africa’s MTN Group and the consortium.

…Ethio Telecom launches mobile money service

On 11th May, Ethio Telecom launched Ethiopia’s first mobile money service, Telebirr, which will meet the growing demand for digital financial services and ensure financial inclusion in the country.

Senior government officials, including Prime Minister Abiy, attended the launching event at Friendship Square in Addis Ababa.

Speaking at the launch Prime Minister Abiy commended all relevant stakeholders that enabled the completion of the project in a short period – five months.

With the launching of the “Tele-Birr”, Ethio-Telecom customers can send, store and receive money by just using their telephone number, the Prime Minister said, further adding that “Tele-Birr aims to extend mobile money services solutions to financially excluded sections of Ethiopian society.”.

According to the CEO of Ethio Telecom, the network plans to recruit 21 million users for the service in the first year of operations, rising to 33 million in five years. Around 40-50% of Ethiopia’s annual economic output will be transacted on the platform by the end of the five years, she said.

In a statement on the launch of the new service, Ethio Telecom said it had 1,600 agents with plans to increase to 15,000 within a year.

It added that a number of bodies including existing microfinance institutions and remittance companies were involved in its development.

Ethio Telecom added that the new service was created with “a major focus and greater efforts to provide financial services to low-income citizens and rural people, who do not have access to banking services”.

Telebirr will allow users to send and receive money, deposit or take out cash at appointed agents, pay bills and receive cash sent from abroad.

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