Home » MTN, Safaricom race to clinch market share in the Ethiopian telecom sector

MTN, Safaricom race to clinch market share in the Ethiopian telecom sector

by Editorial Team

Leading South African and Kenyan telecom operators, MTN and Safaricom, are fighting to clinch market share in the Ethiopian telecom sector, both recently bidding for licenses. 

Reuters cited Ethiopia’s Finance Ministry as saying on April 26 that it received bids from MTN and a consortium including Kenya’s Safaricom for new operating licenses. 

The ministry has launched a new licensing plan to help open up Ethiopia’s telecom industry. The move is considered a significant step in its push to liberalize the economy. Reuters reported that the liberalization would involve the sale of a 45-percent stake in Ethio Telecom, which also plans to launch mobile money transfer services.

In a statement to Reuters, MTN Group President and CEO Ralph Mupita said that Ethiopia’s licensing process “represents the last and largest telco liberalization opportunity in the world.” 

Safaricom’s consortium includes its parent companies Vodacom Group, Vodafone Plc, UK sovereign wealth fund CDC Group and Japanese conglomerate Sumitomo Corporation.

Although the license winners will be announced in the coming days, state officials have said the winners will secure full operating permits. Whoever wins the bid will be required to set up their own network infrastructure, such as cell-phone towers.

Etisalat, Axian, Orange, Saudi Telecom Company, Telkom SA, Liquid Telecom, Snail Mobile, Kandu Global Communications and Electromecha International Projects were also bidding for a license in Ethiopia, but dropped out of the race as of April 28. 

Business Daily reported that they were taken aback by the lack of transparency after it was announced that the winners would have to build their own network infrastructure. 

The Johannesburg-based MTN is Africa’s largest telecom operator, coming in ninth in the list of the world’s leading mobile operators, with 273 million customers in 21 markets. In September 2020, Mupita assumed the CEO role.

One-third of the company’s revenue comes from Nigeria. Tech Build Africa reported that Africa holds 40.1 percent of its telecom market share, with Nigeria accounting for 147 million Internet subscribers in July 2020.

Kenya’s Safaricom is exceptionally dominant on Kenya’s mobile money market, with almost a 99-percent market share as of July 2020. By December, Connecting Africa reported that Safaricom had the most significant mobile data subscription market share, at 67.5 percent, despite a 1.2-percent drop quarter-on-quarter. Businessman and top Kenyan executive Peter Ndegwa currently leads Safaricom as its CEO.

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