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Ethiopia opens telecoms sector to limited competition

Ethiopia opens telecoms sector to limited competition

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The Monopoly of the Ethiopian state Telecoms sector has agreed to allow some local firms to provide internet services through its infrastructure which would help in expanding the data market and its spurring competition

The Ethio Telecom has over 16 million subscribers of internet services in a country of over 100 million people, it developed over 27.7 billion birr ($1 billion) in revenues in the first nine months of 2017/18, 70 percent of which was earned from mobile services and 18 percent from internet.

The company’s head of communications Abdurahim Ahmed stated that the goal of signing the virtual Internet Service Provider Agreement is to increase the numbers of subscribers, he further stressed that there will be competition as well as price reductions which was the core idea of the agreement.  Abdurahim said eight firms have so far signed up to provide the services, which include different internet packages. Foreign companies were not allowed to provide services, he said.

Ethiopia is part of the few African countries that still have a state monopoly in telecoms. The companies that signed agreements with Ethio Telecom have either just been established to sign up for this new business or they were previously doing other business.

Abdurahim said the decision to allow private companies to sell services was not a precursor to fully liberalising the sector. He stated that the agreement has nothing to do with liberalising the sector entirely as these companies will only be providing downstream services While Ethio Telecom has consistently increased annual revenue, vast parts of the country, including the capital still suffer from occasionally patchy mobile reception and internet service.

The low internet penetration and poor quality of service in Ethiopia is often a drag on businesses and is especially seen as an obstacle to technology start-ups such as those that have thrived in neighbouring Kenya.

Ethiopia maintains a tight grip on several other industries, with foreign firms also barred from the banking and retail sectors.

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