Ethiopia, the untapped mobile market

May 5, 2010

Ethiopia, one of the most populated countries in Africa with nearly 80 million inhabitants is one of the least penetrated mobile markets as less than one Ethiopian out of ten has access to mobile communications services according to Dataxis intelligence  latest market analysis. The country which was home to an estimated 6.4 million mobile users at the end of 2009 is a monopoly market operated by state-run incumbent telco Ethiopian Telecommunications Corporation (ETC).

Due to historical reasons, until recently the government refused any liberalization of the domestic communications market claiming the strategic aspects of the industry whereas in the rest of the continent competition has been the key word since nearly a decade.

Both lack of competition and investments have contributed to curb the mobile telephony adoption in Ethiopia in the last five years.

In fact, as the figure below shows it, mobile penetration in Ethiopia rose from less than 1% in 2005 to 8% four years later while the continental average penetration in the referred period stood at respectively 15% and 46%, thus highlighting how far the country is lagging and of course how great is the untapped potential market.

But there are signals that this lethargic situation is coming to an end as the government is keen to modernize and develop the communications industry, an ambitious plan that led it to hand over ETC management to France Telecom under a 3-years agreement. Many see this process as a first step towards opening the domestic market to international competition and thus inaugurate a new era of telecommunications in Ethiopia.

So, will Ethiopia be the next market to enter for international operators that are looking for new lands for growth amid saturation of their homeland markets? According to Dataxis Intelligence, by 2015, the mobile subscribers are expected to reach 35% of the population which in absolute terms means 32 million up from less than 7 million currently.

source dataxis