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- Ethiopian Government has denied entry saying only local companies would be allowed to do offer such services.
- Safaricom had been in discussions with the Ethiopian government to launch the mobile money service in the country
Foreign mobile phone companies like Safaricom, had hoped to introduce its popular M-Pesa mobile money transfer platform in Ethiopian market. However, the Ethiopian Government has denied entry saying only local companies would be allowed to do offer such services.
Safaricom had been in discussions with the Ethiopian government to launch the mobile money service in the country. But the Ethiopia’s central bank has stated that it would only allow locally-owned non-financial institutions to offer mobile money services which means that only companies like Ethio Telecom, the government-owned monopoly, will have permission to move into mobile money services. In other words, foreign players are excluded. For foreign players like Safaricom, to offer the service in Ethiopia, it will have to enter into a partnership with Ethio Telecom, which is in line to be privatised through the sale of a minority stake. A number of global players like Safaricom, Vodacom, MTN, Orange, Etisalat and Airtel, have all expressed interest in gaining access to Ethiopia’s fast-growing mobile phone services market.
Since last year, Ethiopia has been on a drive to open its economy to private investment. It announced its plans to open telecommunications, aviation sector, the State logistics firm and electricity monopoly to private investment. The Ethio Telecom, the government-owned telecommunications monopoly, is regarded as the most attractive due to its huge protected market. Its subscriber base of 44 million makes it the biggest single-country customer base in Africa. M-Pesa reportedly became a game-changer for Kenyans who could sidestep its weak banking system and access digital banking services to transfer money or make payments. It has the potential to transform Ethiopia’s economy which also has a very inefficient banking system and transfer money or make payments at the touch of a phone button.
