Ethiopia’s telecommunications market is poised for further expansion with the anticipated arrival of a third telecom operator by late 2025 or early 2026, according to the Ethiopian Communications Authority (ECA). While the ECA is temporarily pausing the issuance of new licenses in mid-2023, this decision aims to create a more favorable investment environment before welcoming additional global players.
Balcha Reba, Director General of the ECA, explained that this temporary suspension will allow for a reassessment of the current market situation and the implementation of necessary reforms to attract and ensure long-term investment. “Since there are new conditions that require investment, work is being done to see if it is appropriate and to make further improvements if necessary,” Balcha stated. The ECA is carefully evaluating market volatility, the existing regulatory framework, and broader policy factors to attract reputable and qualified operators.
The addition of a third telecom operator is expected to bring several benefits to Ethiopia, including increased competition, improved quality and availability of telecom services, spurred innovation, enhanced network coverage, and reduced costs for consumers.
Ethiopia’s telecom sector has undergone significant changes since 2018, when the government recognized its vital role in the country’s development and embarked on a path towards free markets and privatization. For decades, state-owned Ethio Telecom held a monopoly, limiting competition and innovation. A key milestone in this transformation was the licensing of Kenyan telecommunications giant Safaricom in 2021, marking the arrival of the first private telecom operator in Ethiopia.
Safaricom has experienced substantial growth, reaching an estimated 42 percent population coverage, demonstrating the potential for rapid expansion in the newly liberalized market. This success has informed the government’s decision to introduce a third operator and its current focus on creating favorable investment conditions.
However, previous attempts to issue a second license have been met with challenges, including a lack of satisfactory bids and concerns about political instability. In November 2023, the government reportedly confirmed it had cancelled the process of issuing a third telecoms license due to a lack of interest.
Despite past setbacks, the ECA’s current strategic approach aims to maximize the benefits for Ethiopian citizens by ensuring a strong and competitive telecom ecosystem before welcoming a third operator[6]. In October 2024, Brook Taye, CEO of Ethiopia Investment Holdings, stated that Ethiopia still plans to welcome a third mobile operator due to increased demand for B2B and B2C broadband services. He also revealed plans for Ethio Telecom to list on Ethiopia’s new stock market.
