New Report: Ethiopia - Telecoms, Mobile and Broadband - Market Insights, Statistics and Forecasts

Executive summary

Strong economic growth fostering demand for telecom services

This report provides a comprehensive overview of trends and developments in Ethiopia's telecommunications market. Subjects covered include:

Key statistics

Market and industry overviews

Detailed profile of the monopoly telecom provider in the country

Plans for privatisation and market liberalisation

Government policies affecting the telecoms industry

Regulatory environment

Infrastructure development

Convergence (voice/data, fixed/wireless/mobile).

Internet and broadband development and pricing trends

Mobile data services

3G mobile broadband services and pricing

Average Revenue per User (ARPU)

Local mobile phone manufacturing, including smartphones. Ethiopia is one of the last countries in Africa allowing its national telco, Ethio Telecom (ETC) a monopoly on all telecom services including fixed, mobile, internet and data communications. This monopolistic control has stifled innovation and retarded expansion. A recently expired management contract with France Telecom dramatically improved performance for ETC though there remain weaknesses in quality of service. Although the contract was considered a first step towards privatisation and the introduction of competition, the government in 2013 again rejected calls to privatise the incumbent and allow market competition, citing the need for higher profits from the company to subsidise an unrelated railway project.

Although there is considerable investment in telecoms services, the sector is heavily regulated and the government has complete control over networks, with virtually unlimited access to the call records of all phone users and to logs of internet traffic. Most of the technologies deployed have been provided by ZTE and Huawei.

With a population of almost 90 million, Ethiopia is Africa's second most populous country. Although a number of major contracts have been signed with Chinese vendors since into 2013, the country's mobile penetration remains one of the lowest in the world. Nevertheless, growth is strong and enormous growth potential remains. Albeit from a low base, mobile penetration is rising and the sector continues to benefit from the poor fixed-line infrastructure which has promoted mobile alternatives as the only viable, or robust, telecoms option in many areas.

The countrys broadband market is also set for a boom following massive improvements in international bandwidth, national fibre backbone infrastructure and 3G mobile broadband services. After years of low uptake due to prohibitive pricing, retail prices are now comparable to other markets in the region that are already more developed.

Market highlights:

Value-added services (VAS) licences issued

Ethio Telecom transforms under management contract with France Telecom/Orange

Strong revenue growth despite drastic price cuts

The fastest growing mobile market in Africa

Local handset manufacturing, including smartphones

International internet bandwidth has increased more than six-fold in two years

Significant improvements in broadband affordability

Broadband pricing comparison: ADSL, EV-DO, GPRS, HSDPA

Vodacom and MTS position themselves in anticipation of market liberalisation

Huawei and ZTE share a $1.6 billion contract to develop an LTE network and expand 3G nationally, Ericsson also brought in as network vendor in December 2014

Samsung planning computer equipment assembly plant

Huawei contracted to provide LTE infrastructure for the Addis Ababa Light Rail Transit project

Ethio Telecom extends telecom network access to over 16,000 of 18,000 settlements

Ethio Telecom project upgrade providing LTE to 400,000 in Addis Ababa

Forecasts for mobile and internet market to 2014 and 2017

MetEC begins delivery of smart meters to Ethiopian Electric Utility. Estimated market penetration rates in Ethiopia's telecoms sector-end-2014

Market Penetration rate

Mobile 34%

Fixed 1.0%

Internet 1.3%

(Source: BuddeComm based on various sources)

Companies covered in this report:

Ethio Telecom (Ethiopian Telecommunications Corporation, ETC); EthioNet (ETC); Ethio Mobile (ETC); France Telecom, Tecno Telecom, Smadl, Tana Communication, Thuraya

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