Vodacom Seeks Entry into Ethiopia’s Telecom Sector

Vodacom logoSouth Africa’s Vodacom Group has opened its first office in Ethiopia in an attempt to establish its presence in the country.

The company, which has a strong presence in several African countries including Lesotho, Mozambique, Tanzania, DRC, Nigeria, and of course South Africa, has described Ethiopia as the “most fantastic telecoms market on the continent.”

“We would invest here tomorrow… One operator, 80 million people, the economy growing at 7% – it’s a great market,” Vodacom Group chief executive officer, Romeo Kumalo told Reuters.

The Telecoms firm says it will soon apply for a license to offer value-added services – all other services aside from standard voice calls. This is seen as an attempt to position itself in anticipation of the government’s opening of the country’s telecommunications sector to private investors.

More than 200 Telecoms companies have applied for similar licenses from Ethiopia’s Ministry of Communications and Information Technology, but only MTN group has been granted the authority to offer value-added services. But MTN is yet to set up shop in the country.

Ethiopia’s state-run Ethio Telecom continues to maintain a monopoly in telecoms and refuses to liberalize the sector saying the USD 321 million generated by the company every year is used to finance infrastructure projects. Foreign investors continue to show great interest in the sector, which Ethiopian Prime Minister Hailemariam Desalegn has described as a “cash cow”.

Ethio Telecom recently made deals with Huawei and ZTE to expand the mobile phone infrastructure throughout the country. The two deals will see the introduction of a 4G network in Addis Ababa and expansion of mobile phone and 3G internet access throughout the rest of the country.

Growth in Ethiopia’s Telecoms sector is indicative of the entire continent, which has seen tremendous growth in recent years with subscribers increasing significantly between 2011 and 2012.

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