[Ethiopia] Government’s planned privatization of telecom industry key to bolster penetration, report
27-06-2019 09:25:22 | by: Bob Koigi | hits: 2269 | Tags:

Ethiopia is one of the last countries in Africa to allow its national telco a monopoly on all telecom services including fixed, mobile, internet and data communications.

For many years Ethio Telecom's monopolistic control stifled innovation, restricted network expansion and limited the scope of services on offer.

However, a management contract with Orange Group dramatically improved the company's performance, though there remain weaknesses in quality of service according to a report by ResearchAndMarkets.com 

The contract was considered a first step towards sector privatization and the introduction of competition, and though the government for many years rejected calls to progress along these lines, citing the need for higher profits from the company to subsidise unrelated projects, a shift emerged in mid-2018 with plans to sell a stake in the telco as part of a wider economic reform.

There has been considerable investment in telecoms services, infrastructure and service expansion projects in recent years. Ethio Telecom has secured a network monitoring platform to help it improve services and has also revised plans to launch a telecom satellite, while the government has proposed building a $3 billion technology city.

However, the sector remains heavily regulated and the government has complete control over networks, with virtually unlimited access to the call records of all phone users and to logs of internet traffic. Most of the technologies deployed have been provided by ZTE and Huawei, which have often been preferred for offering vendor financing.

Despite major vendor contracts aimed at improving the reach and capabilities of mobile networks, the country's mobile penetration remains among the lowest in Africa.

Nevertheless, growth is strong and considerable growth potential remains. Policies have been guided by the government's Growth and Transformation Plan.

The country's broadband market is also set to develop further following substantial increases in international bandwidth, improvements in national fibre backbone infrastructure and the growing availability of mobile broadband services via 3G and LTE networks.

After years of low uptake due to prohibitive pricing, retail prices are now comparable to other more developed markets in the region.