Executive summary
The fastest growing market in Africa with enormous potential
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 management contract with France Telecom has led to dramatically improved performance and is seen as a first step towards privatisation and the introduction of competition, but the two companies are blaming each other for weaknesses in quality of service.
With a population of almost 90 million, Ethiopia is Africa's second most populous country. Its mobile market almost tripled in 2011, and yet market penetration is still less than half the African average, so enormous growth potential remains.
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.
Ethiopia is also the latest low-cost location for mobile phone manufacturing. Three companies have started manufacturing in the country with a combined capacity of almost five million units per year and will soon start exporting to other African markets. The first locally manufactured smartphone is expected to hit the market in the second half of 2012. Another 20 companies have been licensed for local mobile phone manufacturing. The government is encouraging foreign investment in a broad range of industries by allowing up to 100% foreign equity ownership.
Market highlights:
- Ethio-Telecom transforms under management contract with France Telecom;
- 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;
- Forecasts for mobile and internet market to 2014 and 2017.
Estimated market penetration rates in Ethiopia’s telecoms sector – end 2012
Market
| Penetration rate
|
|---|
Mobile
| 26%
|
Fixed
| 0.9%
|
Internet
| 1.7%
|
(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
