Sunday, 29 May 2022

Ethio Telecom launches 5G to extend lead over newcomers

by Harry Baldock, Total Telecom
Tuesday 10 May 22

The operator has launched 5G mobile services in the capital, Addis Ababa, with plans to extend these services beyond the city later in the year

Today, state-owned Ethiopian operator Ethio Telecom has announced that it has launched 5G services for the first time. The pre-commercial launch took place in the capital, Addis Ababa, with the operator suggesting that the rollout would be extended to other regions of the country later this year.  "The 5G service is launched in selected places in Addis Ababa," said Ethio Telecom CEO Frehiwot Tamru. "In the coming 12 months, we will have 150 5G sites in Addis Ababa and outside Addis Ababa." No specifics were given as to the network&rsquo…

Today, state-owned Ethiopian operator Ethio Telecom has announced that it has launched 5G services for the first time.

The pre-commercial launch took place in the capital, Addis Ababa, with the operator suggesting that the rollout would be extended to other regions of the country later this year. 

"The 5G service is launched in selected places in Addis Ababa," said Ethio Telecom CEO Frehiwot Tamru. "In the coming 12 months, we will have 150 5G sites in Addis Ababa and outside Addis Ababa."

No specifics were given as to the network’s cost or the company’s coverage goals. However, separate announcements revealed that the 5G network equipment is being supplied by Huawei. 

Ethio Telecom currently covers 97% of the country with its 3G and 4G networks, with the launch of 5G services being viewed as an essential part of modernising the nation’s telecom services for both consumers and enterprises. 

The operator currently has 64 million subscribers for its mobile services throughout the country. 

But despite its coverage and wealth of subscribers, the scale and economic limitations of the Ethiopian market should not be underestimated. A report from DataReportal last year suggested that only around 20% of the Ethiopian population currently has access to the internet, with just 40% owning a mobile phone and 5.8% using social media. 

It seems hard to see where the initial appetite for commercial 5G will come from in this emerging market, with funds perhaps better spent on improving existing services, particularly for rural communities, which make up 78% of the population.

However, it is exactly the untapped nature of this enormous country that makes it a potential goldmine for incoming telecoms players. 

As part of a wider liberalisation scheme led by the Ethiopian Prime Minister Abiy Ahmed, the government announced back in 2020 that it would be seeking to introduce new foreign players to the telecoms sector. Since then, however, this process has not gone to plan, seeing numerous delays and providing only one new entrant in the form of Safaricom Ethiopia

Last year, the government announced that it would sell a 40% stake in Ethio Telecom to private investors. However, in March this year, it was announced that the stake sale would be postponed indefinitely, with the government citing global economic concerns.

A similar story has been seen with regards to a potential third telecoms player in the Ethiopian market. When the liberalisation of the market was first announced, the regulator pledged to make two new telecoms licences available to foreign players seeking to enter the country. However, the ongoing civil war in Ethiopia, coupled with economic uncertainty on a global scale due to the pandemic, made such an investment unpalatable for many investors; a Safaricom-led consortium won the first licence with a $850 million bid, while the only other bid of $600 million from South Africa’s MTN was rejected for being too low. 

The regulator has said repeatedly that they intend to re-auction this licence, but this process too was halted in December due to economic concerns. 

The solo winning bidder, now renamed Safaricom Ethiopia, is busy building out its network in the country, including building its first data centre in Addis Ababa. Naturally, building a mobile network from scratch is a time-consuming endeavour, with the company’s initial commercial launch set to be largely reliant on a network sharing deal they are currently arranging with Ethio Telecom. 

Safaricom Ethiopia was initially hoping to launch commercial services on the 9th of April, but this deadline came and went without comment from the operator, presumably due to the details of the above network sharing deal still being ironed out. 

A new launch date has yet to b announced.  
 

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