Ethiopia launches tender for operator number three

Ethiopia launches tender for operator number three

As promised late last year and confirmed in May, Ethiopia has launched a tender for a new mobile telecoms licence – the country’s second new licence, opening the door to the third national operator in the country alongside state-owned incumbent Ethio Telecom and recent entrant Safaricom Ethiopia.

The Ethiopian Communications Authority has so far reportedly only issued a request for qualifications (RFQ) notice inviting participants to get involved by filing expressions of interest by 15 September.

The announcement, made on Friday, should bring more competition to one of Africa's largest underserved markets. While recent figures are hard to come by, earlier this year Ethio Telecom revealed that it had around 70 million total subscribers, including 27.2 million to its mobile phone-based financial service Telebirr, launched in May 2021.

Safaricom Ethiopia meanwhile, has over three million customers according to March figures, though this figure is like to be higher today – and Safaricom is aiming for 10 million by 2024.

Will things be tough for a new entrant? Not necessarily. Ethiopia has the second-biggest population in Africa – some 120 million people – and only two mobile operators unlike many countries in the continent where as many as four or five are operating.

And penetration, at an estimated 53-57% depending on the source, is low enough to make the country an attractive prospect for new business – except that about three-quarters of the population lives in rural areas, coverage of which may affect ARPU.

Nevertheless, mobile telecoms is still seen as one of the most attractive sectors for investment in the government’s ongoing push to liberalise the economy. However, the truth or otherwise of that view will be revealed when would-be licence-holders respond to the RFQ.


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