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About Ethio Telecom

Ethio telecom is a telecommunications solutions provider operating in Ethiopia. It offers internet, data, VAS, International, and voice services. It is based in Addis Ababa, Ethiopia.

Ethio Telecom Headquarters Location

Churchill Rd Regional Bldg

Addis Ababa, 1047,

Ethiopia

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Latest Ethio Telecom News

Ethiopia is opening up. Here’s what you should know

Sep 9, 2022

Photo: Moti Abebe/Unsplash Abiy’s government is trying to revive its reformer image by promising to open up the banking sector one year after the consortium of Safaricom, Vodacom and Vodafone received a licence to operate in Ethiopia. Ethiopia has been moving toward a more liberal economy after decades of central economic planning. Since the prime minister, Abiy Ahmed, began his reforms in 2018, political think heads proclaimed that it would unlock significant value for Africa’s second-most populous country. That was before the internecine war in Tigray took centre stage. As Ethiopians began the 12-day-long preparations for national day celebrations due this Sunday, Safaricom Ethiopia, started testing its telecoms services in Dire Dawa, Ethiopia’s second-largest city. The same week Abiy Ahmed announced that his cabinet has agreed to a draft proposal that would open Ethiopia’s banking sector to foreign investors. የሚኒስትሮች ምክር ቤት በዛሬው ዕለት ባካሄደው 13ኛ መደበኛ ስብሰባ የባንክ ዘርፍን ለውጭ ኢንቨስተሮች ክፍት ለማድረግ በቀረበ ረቂቅ ፖሊሲ ላይ ተወያይቶ ውሳኔ አሳለፈ፡፡ #PMOEthiopia pic.twitter.com/fwXE5yfI4R — Office of the Prime Minister – Ethiopia (@PMEthiopia) September 3, 2022 Taken together, the banking sector proposal and Safaricom’s trial show how much Ethiopia wants to unfurl the reform flag. What is not clear is if it will fly. First telecoms, now banking In December 2020, Ethiopia invited telecom companies to bid for two licenses to compete against Ethio Telecom, the state-owned carrier. The government also launched a tendering process to sell off 40% of Ethio Telecom to private investors. Eyob Tolina, the state minister of finance boasted that the deal would be “a deal of the century […] the last frontier as far as telecoms is concerned.” But this attempt at liberalising the country’s business scape was hampered by two factors. First, bidders were prevented from inviting third parties to build new telecom towers and other infrastructure. According to Tolina, companies could build their own telecoms infrastructure if they wanted. However, due to the costs and risks associated with building and owning telco infrastructure in a politically unstable market like Ethiopia, the bidding companies were expected to lease from infrastructure owned by Ethio Telecom. Secondly, the new telcos would not be allowed to operate mobile money services, a big part of Ethiopia’s allure. In April 2021, the Financial Times reported that Ethiopia’s deal of the century had an underwhelming performance. Out of the initial 9 companies which expressed interest, only South Africa’s MTN and the Safaricom-Vodafone-Vodacom consortium placed bids for the two available telecom operating licenses. MTN’s $600 million offer was rejected, but the consortium’s $850 million bid was accepted. Two bids for two licenses is hardly how one would imagine a deal of the century tender to proceed. Frustrated potential investors complained that the process was opaque with the government offering little information on investor concerns around accessing foreign exchange and the cost of using state infrastructure. Thus, the telco licence sale which was supposed to be the chef d’œuvre of Ethiopia’s privatisation reform and help raise billions of dollars sputtered, leaving the Safaricom consortium as the sole competitor for Ethio Telecom’s state-backed 50 million strong subscriber base. This recent history is part of the muted cautious optimism that greeted last week’s announcement that Ethiopia might soon welcome foreign investors to its banking sector. Ethiopia’s financial services sector is dominated by bank-led financial services. Owning a business in Ethiopia as a non-citizen is hard; owning a bank as a foreigner is impossible. And until recently, even foreigners of Ethiopian descent were not allowed to invest in the country’s banking system. Ethiopia’s financial services sector is largely controlled by the government. Even though 16 of the country’s 19 banks are privately owned, the Commercial Bank of Ethiopia (CBE) alone controls 59% of total banking assets in the country and 60% of all deposits. The second largest lender, the Development Bank of Ethiopia, holds a huge chunk of non-performing loans (that is, loans that are unlikely to be paid). Both banks are used by the government to finance infrastructure projects and other state-owned businesses and to provide cheap loans to small and medium enterprises (SMEs) in priority areas. In the last ten years, the plan appeared to have worked well. Bank deposits grew 28% annually. Led by the two state-owned banks, loans and profits grew by 31% and 22% respectively, every year between 2009 and 2019. But that was a façade. Private banks in Ethiopia were forced to lend 27% of deposits to the government. The National Bank of Ethiopia, the country’s central bank, was hardly independent. A small committee in the prime minister’s office set monetary policy direction. In addition, poor risk management, and ineffective internal controls at the state-owned banks meant that these loans often financed poorly run state-owned businesses. As a result of strict foreign exchange rules and bans on foreign investment, Ethiopia struggles with a shortage of foreign exchange reserves. Private sector lending is barely 11% of GDP and an astounding 75% of the population does not have a formal bank account. With no functioning capital market,  Ethiopia’s financial system is decades behind its peers. So near yet so far These gaps in lending, financial inclusion and foreign investment are also what has made Ethiopia’s banking sector attractive to foreign investors. Kenyan banks, for example, have had their sights on the Ethiopian market for years. Two of Kenya’s largest banks, KCB Bank and Equity Bank, already have representative offices in the country that carry out trade or export finance activities while waiting for the Ethiopian government to implement reforms to allow them to do more. Africa’s fintech players like Nigeria’s Paga are also interested in the Ethiopian market. Paga acquired Apposit, an Ethiopian software development company in 2020 as part of preparations to bring its payment services to the country. Until 2020, both foreign and domestic startups were not allowed to offer digital financial services like mobile money in Ethiopia. Following this, the state-owned telecom operator, Ethio Telecom launched Telebirr, the country’s first telecom mobile money service and in May last year. Africa’s fintech players like Nigeria’s Paga are also interested in the Ethiopian market. Paga acquired Apposit, an Ethiopian software development company in 2020 as part of preparations to bring its payment services to the country. But local fintech operators worry that opening up the sector too soon may affect their ability to compete. Ethiopia once had a vibrant private sector, which it lost in the years following the Derg’s overthrow of emperor Haile Selassie in 1974 and the subsequent communist rule which lasted until 1987. Since then, the country has struggled to find a path back despite Abiy’s pro-reform stance. The numerous stale proclamations about opening the country’s economy have reduced enthusiastic investors to passive spectators. GDP growth slowed to 2% last year after 15 years of 7% average growth and may reduce further partly due to the ongoing war in Tigray. Opening up the banking and telecommunication sectors in Ethiopia can become a significant boost for the country’s economy. As decades of development-state-led growth is complemented by the inflow of foreign investment and a vibrant digital economy. The country is also actively shopping for investors. In February, Addis Ababa launched Ethiopian Investment Holdings (EIH), a sovereign wealth fund seeking up to $150 billion from foreign investors. EIH currently controls $38.5 billion in assets that include Ethiopia Airlines. While it is a clear departure from years of state-led growth, the government intends to use these funds to mostly support state-owned enterprises, which is an interesting contradiction. The government may be signalling that reform is still on the agenda, but the pace is slow and there are still too many “distractions”. Abiy has said that earning cash from a state monopoly is less important than supporting digital services like digital payments, e-commerce and digitising government services, but wooing investment demands more than talk. Attracting investment into important areas like telecoms, banking and fintech will require more clarity and faster footwork on the part of the government. The failure to find a peaceful resolution to the conflict has affected how investors perceive the nation’s political stability. The fighting has shuttered firms across the country and forced a pause on agriculture. Tigray accounts for a third of Ethiopia’s $350 million revenue from the sale of sesame seeds. In 2021, Ethiopia lost an average of $20 million in export revenues each month. According to Louw Nel, a senior political analyst at the consulting firm NKC African Economics, the Tigray war has cost the country $2.5 billion .Ethiopia is one of Africa’s biggest sinkholes of potential. Opening the financial system can help unleash that potential, but right now, everything still hinges on a vague if. The government needs to demonstrate that it is willing to truly prioritise economic reform. Share this article

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  • Where is Ethio Telecom's headquarters?

    Ethio Telecom's headquarters is located at Churchill Rd Regional Bldg, Addis Ababa.

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