Wednesday, February 8, 2023
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BusinessMobile money allowed for foreign telecom operators

Mobile money allowed for foreign telecom operators

Newly entering telecom operators in Ethiopia can now request to provide mobile financial services in the country after six months of acquiring license.

Talking to The Reporter following the request for proposal the government issued for a second telecom operator license, Balcha Reba (Eng.), Director General for the Ethiopian Communications Authority (ECA) said that the new license bid includes conditions by which the operators can engage in mobile financial services. This sector was previously preserved only for local telecom operators and other businesses that want to engage in the sector.

However, due to, the frequent requests from operators that participated in the bids as well as the promise Prime Minister Abiy Ahmed (PhD) made to open the sector to foreign telecom operators, the new entrants are allowed to operate mobile financial solutions, he said. This decision works for the consortium of operators that acquired an operation license in Ethiopia for USD 850 million months ago.

Telecom operators will have to pay a fee to the National Bank of Ethiopia (NBE) to engage in mobile financial services. This will be, however, stipulated in a yet to be amended mobile financial services directive by the NBE.

Interested bidders are required to pay USD 7,500 to buy documents from the ECA. This price was decreased by half from the document prices for the first license issued by the Authority.

In addition, the new licensees will be appropriated with a new bandwidth that enables them to install 5G services. This criterion was not included in the previous bid because the government wanted to decide on it in a strategic document how and when to allow 5G trials.

Licensed operators will be allowed to build their own infrastructure but independent power and tower companies won’t be allowed to build and rent infrastructure because of ethio-telecom’s huge investment in the sector that can accommodate its operation as well as the new entrants’ operations.

The first license was issued to a consortium of investors that include Vodafone, Vodacom, Safaricom, CDC, and Sumitomo and the investors have committed themselves to investing USD 8.5 billion within 10 years. They are also said to create between 1.1 and 1.5 million jobs within those ten years.

Policy changes made for the second license bid were introduced based on lessons gained from the previous bid process as well as on the basis of assessments made by the macroeconomic committee set under the Prime Minister’s Office (PMO).

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