Ethiopia backtracks on decision to restrict mobile money services
Ethiopia has officially reversed its decision to ban foreign telecommunication operators from providing mobile money services in the country, according to Prime Minister Abiy Ahmed.
Ahmed confirmed the country’s mobile financial services will be opened up to competition, but only in May 2022, a year after the launch of TeleBirr, Ethio Telecom’s mobile financial service.
Ahmed said the government had foregone US$500-million by preventing would-be telecommunication licence holders from rolling out mobile financial services.
“We expect Ethio Telecom to strive in a way to compensate this,” said Ahmed.
Kenya’s Safaricom, part of a consortium of operators including Vodafone, Vodacom, the UK’s CDC Group and Japan’s Sumitomo Corp, and South Africa’s MTN are competing for the country’s two telecommunication licences and are all expected to start providing mobile financial services.
The World Bank, which plans to invest US$200-million in Ethiopia’s telecommunication industry, has warned that attempts by the country’s government to shelter Ethio Telecom from competition in the provision of mobile financial services was not good for the market.
It said the best strategy is to allow Ethio Telecom to compete on equal terms with the new market entrants in providing digital financial services without ownership restrictions.
The government plans to sell a 45% stake in Ethio Telecom to a foreign operator in a bid to make the company more competitive.
Currently, Ethio Telecom has over 53 million mobile phone customers.