MTN primed for Ethiopia growth
While much has been made of MTN’s loss of a telco licence in Myanmar, in South East Asia, the group will be secretly pleased with its progress in another potentially lucrative market, having secured a value-added licence in Ethiopia.
While Ethiopia has a population approaching 90 million, the Ethiopian Review puts the Africa’s second most populous country’s mobile penetration rate at about 17%, sourcing the ITU, with its internet penetration rate at just over 1%.
Telecommunications in Ethiopia, however, is a monopoly controlled by Ethio Telecom, formerly the Ethiopian Telecommunications Corporation (ETC).
Last week, Reuters reported that Ethiopia signed a $700-million agreement with China’s Huawei Technologies to expand mobile phone infrastructure and introduce high-speed 4G broadband network in the capital Addis Ababa and 3G service throughout the country.
The agreement is half of a $1.6-billion project split between Huawei and ZTE, with the latter expected to sign soon.
In 2012, Ethiopia’s government gave approval for private companies to provide value-added services – all services other than standard voice calls.
Ethiopia’s ministry of communications and information technology said it has received applications from 218 firms to provide such services, with MTN already granted a licence in 2012.
While government has ruled out liberalising its telecom sector, according to Reuters, MTN’s CEO Sifiso Dabengwa told the Africa Report in May: “We’re very keen on the possible second licence in Ethiopia. There are still a lot of internal discussions taking place, but we do have a value-added services licence and we are in the process of rolling out some services.”
Vodacom has also expressed an interest in Ethiopia. “We are all interested in Ethiopia,” Group CEO Shameel Joosub told Bloomberg in May following its annual financial results. “You’d be crazy not be.”
Spiwe Chireka, program manager of telecoms at the IDC, has put the cost of license fees for Ethiopia at as much as $300 million, “perhaps even more”.
MTN hit the headlines last month (June) for having furnished the Ethiopian home of African Union head, Nkosazana Dlamini-Zuma.
MTN CEO of corporate affairs, Paul Norman, told the Sunday Times that the company decided to buy the furniture for the AU house in Addis Ababa because the place had not been refurbished in more than a decade.
The group also recently announced the immediate resignation of its CFO, Nazir Patel amid an internal investigation.
The Sunday Times reported that the investigation into Patel focusses on how he “broke MTN’s procedures in transferring its cash out of Iran through Dubai”.
Shares in MTN declined 70 cents at close on the JSE on Friday (26 July) to R176.30, off its highs of R190.89.
More on MTN
MTN furnishes home of African Union head
MTN loses out on Myanmar licence
Loading ...