Connectivity is an essential tool for economic development. It is also a necessary part of achieving many of the UN’s Sustainable Development Goals. Investing in digital infrastructure improves network coverage, quality of service, and reduces prices for mobile and data packages. These improvements increase access to critical services, like health, education and banking. Beyond this, they help create the right environment to grow businesses sustainably.
Ethiopia is home to over 112 million people, making it the second largest country in Africa by population. In 2019, Ethiopia started a process to introduce competition in the telecom industry, as part of the Government’s 2030 Economic Reform Agenda and to support Ethiopia’s digital transformation. Safaricom Ethiopia, which was founded with investment from a consortium comprised of BII, IFC, Safaricom, Sumitomo Corporation, Vodacom and Vodafone Group, was awarded Ethiopia’s first mobile network licence to be granted to a private company in 2021.
Since the launch of Safaricom Ethiopia in 2022, the cost of its mobile data services in the country has fallen by up to 70 per cent. As of 30 June 2024, Safaricom Ethiopia had signed up 4.4 million customers. Safaricom has built nearly 3,000 2G, 3G and 4G network towers covering 44 per cent of the population. The availability of 4G services in the country has doubled.
In partnership with Safaricom Ethiopia, we commissioned the report, entitled ‘Impact of investment in the Ethiopian telecoms market – the story so far’ – to take stock of how the Ethiopian telecoms market has changed and evolved since the liberalisation process of the sector began in 2019.
The report, by Analysys Mason, identifies the impact that competition from Safaricom’s entry in Ethiopia has had, and is expected to have, on the telecoms sector, society and the economy. The report:
- reveals that investments in digital infrastructure and services have resulted in price reductions for mobile and data packages, and improved services for millions of Ethiopians;
- highlights the potential socioeconomic benefits resulting from improved digital connectivity based on case studies from other comparable African markets; and
- illustrates the benefits of 81 per cent of the Ethiopian households now having access to a mobile phone.
In particular, the report cites Ethiopia’s mobile money market as a key driver of economic opportunity. Safaricom’s M–PESA provides financial services to millions of people who have a mobile phone but no bank account, or only limited access to banking services. It was launched in Ethiopia in August 2023 and over 5.8 million customers have registered for the service. It has been instrumental in improving financial inclusion in Kenya and is expected to do the same for Ethiopia.
This report gives a snapshot of the Ethiopian telecoms market today. We hope and expect to look again in years to come, and see more evidence of the many positive impacts on society.
