Ethiopia to get a new Mobile Network Operator that will provide 4G & 5G

Ethiopia has been talking for a long time about getting a new MNO. Finally, they may have one.

Bloomberg reported:

Ethiopia awarded a new telecommunication license to a consortium including the U.K.’s Vodafone Group Plc, paving the way for a long-awaited opening of the sector to outside investors.

The government of the Horn of Africa country had received two offers. The consortium led by Safaricom submitted a bid of $850 million, according to the prime minister. The other from MTN Group Ltd., Vodacom’s Johannesburg rival, and partners including the Silk Road Fund, a Chinese state investment group, was for $600 million.

The winners -- Vodafone, Vodacom Group Ltd., in which the British carrier has a majority stake, and Nairobi-based Safaricom Ltd. -- will invest $8.5 billion in their network during the coming 10 years, including the license fee. Others include CDC Group Plc and Sumitomo Corp.

The government of the Horn of Africa country had received two offers. The consortium led by Safaricom submitted a bid of $850 million, according to the prime minister. The other from MTN Group Ltd., Vodacom’s Johannesburg rival, and partners including the Silk Road Fund, a Chinese state investment group, was for $600 million.

A momentous day for #Ethiopia! Imagine the quality service and efficiency it will engender, the new opportunities, millions of jobs and the transformative effect to our economy! 🇪🇹🇪🇹🇪🇹🇪🇹🇪🇹🇪🇹🇪🇹🇪🇹🇪🇹🇪🇹🇪🇹🇪🇹🇪🇹 https://t.co/CCHeZq1OWF

— ብሩክ ታዬ Brook Taye (@btaye) May 22, 2021

Al Jazeera added:

The Safaricom-led 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, Brook said.

“A momentous day for Ethiopia!” he wrote on Twitter.

“Imagine the quality service and efficiency it will engender, the new opportunities, millions of jobs and the transformative effect to our economy!”

Ethiopia’s telecoms reforms also include a plan to sell a stake in Ethio Telecom, a move officials hope will make the firm more efficient.

It should be noted that last year, Vodafone group invested in AST & Science's SpaceMobile to Beam 4G / 5G Directly to Devices. Nick Read, CEO, Vodafone Group, said: “At Vodafone we want to ensure everyone benefits from a digital society – that no-one is left behind. We believe SpaceMobile is uniquely placed to provide universal mobile coverage, further enhancing our leading network across Europe and Africa - especially in rural areas and during a natural or humanitarian disaster - for customers on their existing smartphones.”

There is very little information on Global Partnership for Ethiopia available at the moment. This Wikipedia article has some details that will hopefully be expanded later on.

Related Posts:

• Connectivity Technology Blog: AST & Science's SpaceMobile to Beam 4G / 5G Directly to Devices
• Operator Watch Blog: Ethiopia Ready to Break Telecom Monopoly
• Operator Watch Blog: Eritrea, the last country in the world to adopt a mobile phone system 

Africa: The Race For No. 2 Operator

MTN is the largest mobile operator group in Africa with roughly 168 million subscribers, but who is number 2?

Airtel just crossed 100 millions subscribers in Africa and many news sites have started calling them the second largest operator group in the region. Livemint for example reported:

Bharti Airtel’s Africa arm has crossed the 100-million customer mark across its operations in the continent, the company said in a statement on Wednesday.

This is significant for the company, which entered the continent in 2010. Airtel Africa is currently the second-largest mobile operator in Africa by the number of active subscribers; South Africa’s MTN is the largest.

Airtel Africa is the holding firm for Bharti Airtel’s operations in 14 countries in the continent across three regions — Nigeria; East Africa, comprising Kenya, Uganda, Rwanda, Tanzania, Malawi and Zambia; and the rest of Africa, including Niger, Gabon, Chad, Congo Brazzaville, the Democratic Republic of the Congo, Madagascar and Seychelles. Nigeria alone accounts for almost half of its earnings before interest, taxes, depreciation and amortisation (Ebitda).

According to this Bloomberg article, back in July 2019, Airtel was the 4th largest by subs numbers.

• MTN 167.7 million 
• Orange 120 mil 
• Vodacom 110 mil 
• Airtel 98.9 mil

There is a small caveat though. While MTN does not include Middle East, Orange does. Again, Vodacom includes Safaricom in which it has around 35% stake. Vodafone, Vodacom’s parent (64.5% stake), had an additional 49.3 million customers in its operations in Egypt and Ghana at the end of June. If we include Vodafone, Vodacom and Safaricom, it would be going head-to-head with MTN for the top place.

The Guardian, Nigeria has a good summary of the top 4 mobile operators in Africa here.


Related Posts:

• Maroc Telecom's African Presence
• Lesotho: First 5G launch in Africa

Ethiopia: Finally opening up

Ethiopia’s state owned telecommunications company, Ethio Telecom is currently Africa's largest mobile operator.

According to IT Web’s report with over 57 million mobile subscribers as at November 2017, Ethio Telecom had beat MTN Nigeria to become Africa’s largest in terms of its mobile customer base.

A sector expert was quoted to have said:

“Ethio Telecom of Ethiopia is now the largest mobile operator in Africa in terms of subscriptions, with 57.34 million mobile subscriptions at end-2Q17. Ethiopia is also one of the very few African countries that has not liberalised its telecoms market and introduced competition, so Ethio Telecom has a monopoly,” 

An expansion drive costing over $1.6 billion in the last few years has contributed greatly to this success. According to a statement on their website: 

"The expansion project has also significantly improved quality of services, with customers enjoying 3G wireless services by upgrading the 2G network across all regions covering all over the country; with also 4G LTE, super-fast services, launched in Addis Ababa. Over the past few years, Ethio Telecom has been transforming itself to meet its vision of becoming a world class operator and our journey so far shows we are on the right track.”

The company reports that 64.4 million of its customers are mobile phone subscribers, and 1.2 million are fixed line users. The company's internet service users have also reached 16 million. Ethiopia is Africa’s second most populous nation behind Nigeria and the numbers are believed to have played a significant part.

The other reason for this success is the strictly regulated economy of Ethiopia and the government til date has not liberalized the telecoms sector resulting in Ethio Telecom having a monopoly as the state-owned and only operator. 

However the currently government under Prime Minister Abiy Ahmed is attempting to open up the economy and has announced plans split state-run monopoly Ethio Telecom in two and gradually sell shares in both entities to top telecoms companies in a bid to increase competition.The PM has said: 

“…If Somalia with 12 million population has four telecom operators, Ethiopia with over a hundred million population has to also open its doors to multiple telecom operators,” 

Under the plan, a total stake of between 30 per cent to 40 per cent in Ethio Telecom will be sold to operators, provided they are rated as top ten players globally.

The Ethiopian government also routinely cuts the internet mainly for political but also academic reasons.To forestall the leakage of key university entrance exams, the authorities blocked the internet in the past. Activists have slammed the government repeatedly for cutting off the internet because they wanted to control the spread of information and materials relating to anti-government protests and human rights abuse.

A more privatized sector and less governmental interference will hopefully prevent this. 

Both MTN and Vodacom see potential for growth in the Ethiopian market. An MTN spokesperson states:

"MTN has long held the view that Ethiopia offers great opportunities for growth, both for the people of Ethiopia and for the businesses that could serve them, through the liberalisation of the telecommunication market in that country. MTN is excited by the potential opening up of the Ethiopian market as it would be a natural fit for MTN's existing and extensive Pan-African footprint. MTN's licence to provide value-added services in Ethiopia was recently renewed and we continue to maintain an office in Addis Ababa. Ethiopia presents many exciting telecommunication opportunities and we look forward to further discussions with that nation's authorities on potential partnerships and opportunities."

MTN operates in 22 countries across Africa and the Middle East, and Vodacom operates in five African nations.

While Vodacom have said: 

"Ethiopia is an attractive market so it follows that there would be interest. Naturally, this is dependent on what might become available and if it fits within our investment parameters." 

However PM Ahmed Abiy also clarified the conditions for selling shares in the state telco: 

“Certain amounts of shares will be sold gradually in 10, 20, 30 years. We are not giving it up in one go, it is not possible.”

Ethiopians will be offered 5% in the new companies, and between 30% and 40% will be sold to telecoms operators that are top-10 players globally. There’ll be at least a year or two of “intensive study”, he said in televised comments.