Privatisation of incumbent ETC stalled again
This annual report provides a comprehensive overview of trends and developments in Ethiopia’s telecommunications market. Subjects covered include:
- Key statistics;
- Market and industry overviews;
- Detailed profile of the monopoly telecom provider in the country;
- Plans for privatisation and market liberalisation;
- Government policies affecting the telecoms industry;
- Regulatory environment;
- Infrastructure development;
- Convergence (voice/data, fixed/wireless/mobile).
- Internet and broadband development and pricing trends;
- Mobile data services;
- 3G mobile broadband services and pricing;
- Average Revenue per User (ARPU);
- Local mobile phone manufacturing, including smartphones.
Ethiopia is one of the last countries in Africa allowing its national telco, Ethio-Telecom (ETC) a monopoly on all telecom services including fixed, mobile, internet and data communications. This monopolistic control has stifled innovation and retarded expansion. A recently expired management contract with France Telecom dramatically improved performance for ETC though there remain weaknesses in quality of service. Although the contract was considered a first step towards privatisation and the introduction of competition, the government in 2013 again rejected calls to privatise the incumbent and allow market competition, citing the need for higher profits from the company to subsidise an unrelated railway project.
With a population of almost 90 million, Ethiopia is Africa’s second most populous country. Although a number of major contracts have been signed with Chinese vendors since into 2013, the country’s mobile penetration remains one of the lowest in the world. Nevertheless, growth is strong and enormous growth potential remains. Albeit from a low base, mobile penetration is rising and the sector continues to benefit from the poor fixed-line infrastructure which has promoted mobile alternatives as the only viable, or robust, telecoms option in many areas.
The country's broadband market is also set for a boom following massive improvements in international bandwidth, national fibre backbone infrastructure and 3G mobile broadband services. After years of low uptake due to prohibitive pricing, retail prices are now comparable to other markets in the region that are already more developed.
- Value-added services (VAS) licences issued;
- Ethio-Telecom transforms under management contract with France Telecom/Orange;
- Strong revenue growth despite drastic price cuts;
- The fastest growing mobile market in Africa;
- Local handset manufacturing, including smartphones;
- International internet bandwidth has increased more than six-fold in two years;
- Significant improvements in broadband affordability;
- Broadband pricing comparison: ADSL, EV-DO, GPRS, HSDPA;
- Vodacom and MTS position themselves in anticipation of market liberalisation;
- Huawei and ZTE share a $1.6 billion contract to develop an LTE network and expand 3G nationally;
- Samsung planning computer equipment assembly plant;
- Forecasts for mobile and internet market to 2014 and 2017.
Estimated market penetration rates in Ethiopia’s telecoms sector – end-2013
(Source: BuddeComm based on various sources)
Companies covered in this report:
Ethio-Telecom (Ethiopian Telecommunications Corporation, ETC); EthioNet (ETC); Ethio-Mobile (ETC); France Telecom, Tecno Telecom, Smadl, Tana Communication, Thuraya