South Africa telcoms MTN, Vodacom welcome Ethiopia's liberalisation move

South Africa

South Africa’s MTN Group and Vodacom Group have expressed interest in the Ethiopian market, following the announcement by the East African nation that it would partially liberalise its economy.

Ethiopia said on Tuesday it would open its state-run telecoms monopoly and state-owned Ethiopian Airlines to private domestic and foreign investment, a major policy shift that will loosen the state’s grip on the economy.

South African telcoms respond

MTN told Reuters news agency on Wednesday it was excited by the potential opening up of the Ethiopian market “as it would be a natural fit for MTN’s existing pan African footprint”.

“Ethiopia presents many exciting telecommunication opportunities and we look forward to further discussions with that nation’s authorities on potential partnerships and opportunities,” the mobile network provider said.

Vodacom Group also said that it will be following ‘what becomes available’ and investing accordingly since ‘Ethiopia is an attractive market’.

It is unclear whether the government would consider licensing foreign mobile operators. Interest might be limited if the only option is a minority stake in the monopoly.

Ethiopia’s season of reform

The ruling party coalition in Ethiopia, the Ethiopian People’s Revolutionary Democratic Front (EPRDF) said that economic reforms are needed to sustain rapid growth and boost exports.

The statement issued by EPRDF’s executive committee referenced foreign exchange shortages that are draining shops of goods that suppliers cannot access hard currency to import.

The economic reforms come two months after Abiy took power promising political changes to address roiling anger among young people over ethnic marginalisation and unemployment.