MTN Looks To Expand In Ethiopia, Once Closed To Mobile Service Market Competitors

Written by Peter Pedroncelli

Africa’s largest mobile operator, South Africa-based MTN, is looking at a potential launch in Ethiopia, where mobile service is dominated by
government-owned monopoly Ethio Telecom.

MTN is already the dominant telecommunications company in Nigeria, Africa’s most populous country, with 190 million people. Ethiopia,
— population, 105 million people — could be a major market for the South African firm, according to ITWebAfrica.

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Ethiopian Prime Minister Abiy Ahmed said in 2018 that he is looking to bring in private investors to the country’s telecommunications sector for the first time, Bloomberg reported.

This prompted interest from operators wishing to tap into Africa’s second most populated country and one of its fastest-growing economies.

Landline and mobile service in Ethiopia have been under government control since the early days. Ethiopia was one of Africa’s last big telecommunications monopolies. Lack of competition held the country back.

Mobile-phone penetration, which averaged 70 percent of the population elsewhere in Africa in 2013, was closer to 25 percent in Ethiopia, according to TheEconomist.

tax dispute mobile service
MTN is considering entering the Ethiopian market. Photo – AP – Sunday Alamba

The same is true of internet connectivity. Just 2.5 percent of Ethiopians had access to the internet, compared with 40 percent in neighboring Kenya.

To keep the government in control and ensure no competition, voice-over-IP services such as Skype and Google Talk were prohibited in Ethiopia between 2002 and 2012, MFA reported.

MTN interested in entering Ethiopia’s mobile service market

But new leadership in Ethiopia has brought a change of strategy and an appreciation for the importance of competition in the telecoms industry.

Abiy, a former minister of science and technology, took office in 2018 and has since part privatized a number of state-owned companies including telecoms provider Ethio Telecom in an effort to improve internet access, according to CNN.

MTN wants to enter the Ethiopian market, thanks to the government’s search for investors and the opportunity that the region provides.

MTN Group CEO Rob Shuter recently said he wants to do business in Ethiopia as part of a strategy to enter new markets where the company can become a major player, according to Mobileworldlive.

Few large markets remain underpenetrated, Shuter said. In Ethiopia, MTN could become a major operator.

The MTN Group has more than 221 million customers in 22 markets across Africa and the Middle East.

Apart from MTN, French mobile operator Orange and South Africa’s Vodacom have shown interest in being involved in the privatization of Ethio, which is expected to be split into two businesses, according to ITNewsAfrica.