Ethiopian gov’t suspends entry of foreign telecom infrastructure companies

The Ethiopian government has made a significant decision to suspend the entry of foreign telecom infrastructure companies into the country, impacting the future of the telecom sector in the nation. The move comes after the review of companies intending to buy a stake in Ethiopia Telecom, signaling a shift in the country's plan to liberalize the market. This decision has raised questions about the readiness of Ethiopia's telecom infrastructure and the potential impact on the economy. To provide insight into this development, CNBC Africa engaged in a conversation with Economic Analyst, Samuel Getachew. Getachew shed light on the implications of the government's decision, the challenges facing Ethiopia's telecom sector, and the broader economic landscape amidst the COVID-19 pandemic and political uncertainties. The decision to halt the entry of foreign telecom infrastructure companies has stirred concerns among industry stakeholders and the public. Ethiopia Telecom has been lobbying for a role in the future telecom sector growth, aiming to secure financial benefits and contribute to the transformation of the country's telecom industry. However, the suspension specifically targets companies looking to build and rent infrastructure in Ethiopia, rather than established telecom service providers like Vodacom or Safaricom from Kenya. Getachew highlighted the underfunded state of Ethiopia Telecom and the need for international expertise and investment to modernize the sector and enhance service delivery. While several foreign telecom infrastructure companies have shown interest in entering the Ethiopian market, the government's decision raises questions about the country's infrastructure readiness. The pause on new entries has left uncertainty about the timeline for announcing telecom operators eligible to operate in Ethiopia. The COVID-19 pandemic, ongoing conflicts, and the postponed elections have shifted the government's priorities, potentially delaying the telecom sector's liberalization process. Despite the challenges, the homegrown economic reforms initiated by the Ethiopian government aim to attract foreign investments and foster economic growth. The impact of the pandemic on these reforms and the overall economy remains uncertain. The discussion also touched on Ethiopia Telecom's reported increase in revenues during the pandemic, a development met with skepticism by some observers. The economic contribution of the telecom sector to Ethiopia's GDP and the potential benefits of introducing new players through privatization were key points of interest. While the exact impact on GDP remains to be seen, the telecom sector, alongside Ethiopian Airlines, plays a crucial role in the country's economy, providing employment opportunities and driving economic growth. As Ethiopia navigates the complexities of the telecom market liberalization and economic reforms, the path ahead is filled with challenges and opportunities. The government's decision to suspend the entry of foreign telecom infrastructure companies reflects a strategic reassessment of the sector's future and underscores the need for careful planning and collaboration to ensure a successful transition to a more competitive telecom landscape.