Ethiopia vows it won’t renege on mobile financial services deal
Ethiopia’s State Minister, Ministry of Finance Dr Eyob Tekalign Tolina said the suspension of the bidding process for the country’s second telecommunications licence will not impact Safaricom’s planned introduction of mobile financial services.
Last year a consortium led by Safaricom secured a mobile operator licence, but this does not permit the roll out of mobile financial services.
The operator licence is scheduled to be upgraded to allow for this facet, but Safaricom is now unclear about this development after the Ethiopian Communication Authority (ECA) in December 2021 suspended the tender process for the second telecommunications licence.
Following pressure from stakeholders, including the World Bank, the Ethiopian government said it would issue a mobile financial services licence in 2022.
Dr Tolina said Ethiopia will keep its promise to give Safaricom an M-Pesa licence by May this year.
The State Minister was quoted by Kenya’s Business Daily newspaper as saying, “The second operator licence is still in the making but we have delayed it because of the current situation (fighting in the Tigray region) we felt we will not get the right competitors now. We have pushed it by a few months. That has nothing to do with financial services licence. Safaricom will get that (mobile financial services license) because that was part of the promise we made to give it this year.”
In addition to auctioning of two full-new service telecommunications licences, the Ethiopian government is also preparing to sell a 45% stake in the incumbent Ethio Telecom as part of a broader liberalisation of the country telecom sector.
In May last year, the government said the country’s mobile financial service will only be opened up to competition in May 2022, a year after the launch of Safaricom’s TeleBirr.
Currently, Ethio Telecom has close to 51 million customers.
Last week, Ethio Telecom announced that the number of TeleBirr users has now reached 13.1 million with total transactions at 5.1 billion birr.