Frequently Asked Questions
The concept of “telecommunications liberalization” means
introducing competition into the telecoms sector by allowing
commercial enterprises to set up new telecoms businesses as long
as they comply with government-defined policies, laws,
regulations, and directives. The Ethiopian Communications
Authority (ECA) has sought interest from international
telecommunications operators to manage two new telecoms licenses
in Ethiopia, which would potentially allow three operators with
licenses to deliver telecommunications services in Ethiopia:
Ethio Telecom and two new license holders. On 22 May 2021 one
license was awarded to the Global Partnership for Ethiopia, out
of the potential two available. The launch of another tender
process is currently under consideration for the second license.
Liberalization of the telecommunications sector should not be
confused with the partial privatization of Ethio Telecom.
Issuing the first new license (to the Global Partnership for
Ethiopia) is taking place simultaneously, in addition to the
partial privatization of Ethio Telecom, which is a separate
process. Liberalization of the sector aims to enable Ethiopia to
maximize the transformational opportunities presented by the
digital economy. Opening of the sector to healthy competition
will lead to improved telecommunications services and with the
passage of the Communications Service Proclamation (the “CSP” or
“Proclamation”) on 12 August 2019, the Ethiopian Government
effectively lifted restrictions on the telecommunications
sector, allowing local and international telecommunications
operators to take part and offer their services in Ethiopia for
the first time in the nation’s history. The Ethiopian
Communications Authority (ECA) was established by the CSP as an
independent federal government regulatory authority. This
Proclamation mandated the ECA to regulate the telecommunications
sector and as set out in its objectives, to promote: the
development of high quality, efficient, reliable and affordable
communications services throughout the nation; a competitive
market for the achievement of these goals; both accessibility
and the interests of customers. The ECA is also mandated to
manage the liberalization process.
After careful examination of all the different available
options, the Government of Ethiopia reached the decision that
liberalizing Ethiopia’s telecoms sector is the best way forward
to bring improved connectivity for Ethiopians. Greater
competition helps to grow markets and brings with it economic
and social benefits. New expertise and more competition will
help us develop our telecommunications sector faster so we can
embrace e-commerce and digital payments as other countries
across Africa and other parts of the world have successfully
done. Introducing competition to the sector will lead to
improved service delivery so that Ethiopians now and in the
future have reliable, efficient and high-quality
telecommunications services leading to a better quality of life.
On a national level, opening up Ethiopia’s telecommunications
sector to competition and private sector participation will
enable us to unlock the transformational power of the digital
economy, creating jobs and paving the way for digital services
in areas such as health, education and finance.
The first license has been awarded to the Global Partnership for
Ethiopia - a private international consortium of
telecommunications giants led by Kenya's Safaricom in
partnership with Vodacom Group (South Africa), Vodafone Group
(UK), Sumitomo Corporation (Japan), CDC Group (UK).
See announcement of the winning bid here
The launch of another tender process is currently under
consideration for the second license.
The Global Partnership for Ethiopia will now play an important
role in the most ambitious growth phase of our economy, aiming
to start providing telecommunications services from 2022, and
investing USD8.5 billion over the next decade.
here
The launch of another tender process is currently under
consideration for the second license.
Liberalization of Ethiopia’s telecoms sector is part of the
government’s 2019 Home Grown Economic Reform Agenda (“2019
Reform Agenda”), which highlights the role of the private sector
in driving sustained growth and creating jobs. Addressing the
bottlenecks related to productivity, quality and competitiveness
is critical to enable the private sector to fully utilize
opportunities available for sustainable development and
transformation. Expansion of Information and Communication
Technology (“ICT”) infrastructure across the nation is also
specified in the 2019 Reform Agenda as one of the goals of
digital transformation and it is particularly important to
ensure telecommunications infrastructure and services are
distributed fairly and are accessible to all. Reform of the
telecoms sector is key to ensuring universal access. The focus
on transforming to a digital economy is designed to bring
improvements in productivity, efficiency, transparency, and
accountability. On 17 June 2020, the Council of Ministers
approved the Digital Transformation Strategy, which is aligned
with the 2019 Reform Agenda. Central to a digital economy is a
world class telecommunications service. The process of planning
for the issuance of the new licenses has been the ECA’s focus
since inception. Between 22 October 2019 and 22 November 2019,
the ECA held a public consultation on the new regulatory
framework which yielded helpful contributions to the ECA’s
efforts to issue several draft directives that aim to guide the
regulatory process and ensure that telecommunications services
are provided to the people of Ethiopia in a manner consistent
with the objectives of the CSP. The directives, issued for
stakeholder consultation in both English and Amharic languages,
elicited helpful comments both from stakeholders and the public
that guided in the formulation of the final draft directives.
The ECA recognized from the start the paramount importance of
establishing a clear, consistent, fair and transparent
regulatory environment for the success of the liberalization
reforms. In May 2020, the ECA invited companies to submit their
Expressions of Interest (EOI) to take part in this process. We
received twelve EOIs, nine from telecoms operators, two from
non-telecoms operators and one incomplete submission. The next
step was to publish the Request for Proposals (RFP) where
interested and qualified companies could submit their technical
and financial bids. We issued the RFP on 27 November 2020 and
made a public announcement, the details of which are available
in the HYPERLINK "https://eca.et/news/" news section of our
website. By the deadline of April 26th 2021, two complete
proposals had been successfully submitted. Following a rigorous
evaluation of the offers, and in line with the rules laid out in
the RFP, one license application made by the Global Partnership
for Ethiopia was accepted, while the second proposal was
rejected. The launch of another tender process for the second
license is currently under consideration.
Opening up the sector to competition has many benefits for
consumers. These will include faster, more reliable data and
phone services, with better reach across the country than is
currently available. With a new telecoms operator (the Global
Partnership for Ethiopia) aiming to start providing
telecommunications services from 2022 alongside Ethio Telecom,
citizens and businesses will have more choice over which company
offers them the best service for their particular needs.
Improved connectivity will mean consumers are better placed to
benefit from the huge opportunities presented by the digital
economy. Improved connectivity and developing ICT usage can
increase the efficiency and effectiveness of government and
public services, including better governance practices and
efficient use of resources. Additional benefits include: More
control over personal finances through digital banking and
digital payments Improved healthcare with more health education
available online and doctor patient consultations possible over
the internet or mobile phone; improved access to health
services, especially in less populated areas, by enabling the
use of micro-health coverage for emergency services Better
access to quality education with learning and materials
accessible online via phone or computer Broader consumer choice
for goods and services and more convenient shopping experiences
and options such as food delivery and movie streaming Expanding
digital financial inclusion services to low-income households
will help reduce poverty, in giving opportunities to women and
young people, and increasing their participation in the economy
by inducing a saving culture. Better sharing of information
brought about by improved connectivity can also help to develop
small and micro enterprises Increased use of ICT can also assist
in the expansion of clean energy investments, reducing air
pollution All of these developments and more will lead to the
creation of significant employment opportunities in the digital
economy.d
Faster, more reliable connectivity will provide a significant
boost to sectors such as manufacturing, tourism, agribusiness,
e-commerce and the start-up ecosystem. Businesses will be able
to develop their business models faster and operate more
efficiently, providing a wealth of employment opportunities as
these sectors grow. Reliable and accessible communications will
attract both local and inward investment, creating further
employment. Additional benefits to businesses include: More
flexible working practices possible for staff, allowing firms to
attract the best talent from across the country Farmers and
agribusiness will be able to access vital real-time information
such as livestock tracing, weather data and commodity pricing
improving productivity Farmers will have better access to online
loan services for the purchase of fertilizers and seeds; digital
micro-insurance; as well as income saving and market information
Entrepreneurs and small and medium-sized businesses will be able
to reach new customers via online platforms and convert sales
more easily with digital payments Construction and manufacturing
companies will have access to real time project management
software ensuring projects and processes are run more
efficiently Global companies reliant on internet connectivity
(such as GPS-operated taxi services, movie streaming, online
music and food delivery) will enter the local market, creating
new jobs and stimulating local investment.
Opening up the telecoms market will enable our citizens and
businesses to be fully involved in the array of opportunities
that a well-functioning digital economy provides, and this is
why we have invited participation from experienced international
telecommunications companies to offer their expertise and
services alongside that of Ethio Telecom. This critical
undertaking is about offering more choice to consumers and
businesses; healthy competition helps to develop markets,
bringing with it economic and social advantages along with new
jobs. As stated above, the ECA has developed a legal and
regulatory framework that aims to ensure that principles such as
fair competition, consumer protection, and universal access are
upheld in the public interest. The policies will, among other
things, ensure that Ethio Telecom’s infrastructure can be shared
on fair and reasonable commercial terms. Also it is expected
that the new operators (the Global Partnership for Ethiopia)
alongside building their own infrastructure will enter into
infrastructure and facilities sharing arrangements with each
other in order to deploy their network coverage quickly and in a
cost-efficient way.
No, any new licensees will not get involved in Ethio Telecom’s
partial privatization. Privatization is not within the ECA’s
mandate; the responsibility assigned to the ECA in the
Proclamation is to oversee the liberalization and licensing
process. Through its mandate to boost competition in the sector
(in order to provide a better telecommunications service to the
people of Ethiopia), the ECA was seeking two telecom business
operators with proven expertise to improve the quality of
service and to invest in telecommunications infrastructure and
services. As stated in other sections of this FAQ, by the
conclusion of the liberalization process there will be three
telecommunications operators in Ethiopia: the incumbent operator
Ethio Telecom, along with two new, full-service license holders.
One license has been awarded to the Global Partnership for
Ethiopia (announced on 22 May – click to see HYPERLINK
"https://eca.et/2021/05/22/press-release-telecommunications-service-operator-license-award/"
press release), and the launch of another tender process for the
second license is currently under consideration.
The winner of the telecommunications license was announced on 22
May, and the new operating company aims to start providing
telecoms services from 2022. The specifics of rolling out
services will be guided by Universal Access and Service
Framework. The new license holder (the Global Partnership for
Ethiopia) will be expected to rollout services in dense urban,
urban and suburban areas, where just under a quarter of our
population lives, within the first year of operation. Services
in rural areas are required to be rolled out over the four years
that follow. The licenses will be for a 15-year period with the
prospect of renewal if all terms and conditions are met.
The Ethiopian Communications Authority (ECA) was established on
August 12, 2019 through the Communications Service Proclamation
No. 1148/2019 (the “CSP” or “Proclamation”) as an independent
federal government regulatory authority. The Proclamation
mandates the ECA to regulate the telecommunications sector as
well as promote: the development of high quality, efficient,
reliable and affordable communications services throughout the
nation; a competitive market for the achievement of these goals;
both accessibility and the interests of consumers. Therefore,
the ECA is the entity mandated to award the two new,
full-service licenses through a competitive licensing process.
The first license was awarded on 22 May 2021, and the launch of
another tender process for the second license is currently under
consideration. The ECA has appointed and is being advised by a
highly experienced team of experts led by the International
Finance Corporation (IFC), a member of the World Bank Group, to
support the ECA through the process of issuing the new licenses.
The independence of the ECA will be guaranteed through the
exercise of the powers given to it under the Proclamation.
The new licenses must be awarded to qualified telecom operators
selected through a competitive bidding process according to the
Tender Regulations, Technical and Financial criteria. The RFP
was published on 27 November 2020, inviting telecom operators to
submit proposals (bids) to take part in Ethiopia’s telecom
market, and the submission process was closed on 26 April 2021.
In responding to the RFP, each bidder had to comply with strict
technical qualification criteria to demonstrate the company had
the technical expertise required to manage a license of this
size in Ethiopia, in addition to strict financial qualification
criteria to show it had the resources to manage a license of
this scale. By the deadline of April 26th 2021, two complete
proposals had been successfully submitted. Following a rigorous
evaluation of the offers, and in line with the rules laid out in
the RFP, one license application made by the Global Partnership
for Ethiopia was accepted, while the second proposal was
rejected. The launch of another tender process for the second
license in due course is currently under consideration.
Yes, from the start the ECA recognized the paramount importance
of establishing a clear, consistent, fair and transparent
regulatory environment for the success of the liberalization
reforms. Bids submitted were evaluated in accordance with the
tender regulations, and technical and financial criteria set out
in the RFP. The bidding process was fully competitive, and the
management and selection process was transparent.
The purpose of the liberalization is to encourage healthy
competition in this sector, and this is expected to drive down
costs to the consumer. We know our citizens are also unhappy
with the reliability and quality of service they currently
receive. It is critical to make sure that more Ethiopians have
access to faster, more reliable, accessible data and phone
services and that is why we are bringing in strategic partners
for growth, with extensive experience in this area. The ECA has
responsibility for economic regulation under the Proclamation
and this includes Universal Access of communication services to
all. The Authority has the power to develop annual objectives
for Universal Access to communication services in Ethiopia. This
is to enable the largest number of users to have access to
telecommunications services, particularly in rural and remote
areas of Ethiopia and there is a Universal Access Fund
established by the Proclamation that will be used to support
universal access to Communication Services in Ethiopia.
The International Finance Corporation (IFC), member of the World
Bank Group and the largest global development institution
focused on the private sector in emerging markets, has been
engaged to advise the ECA throughout this transaction. IFC is
highly experienced in bringing together the right experts for a
process of this magnitude and has identified and brought onboard
the necessary economic, technical, legal, tax and other
expertise.
Yes, this is still the right time. Covid-19 is not only a global
health emergency, but it is also causing a devastating impact on
economies around the world, with governments and businesses of
all sizes having to make drastic changes to adapt to the rapidly
evolving situation. The priority of our government includes
battling the virus by saving lives, supporting the nation’s
health workers, and containing the spread of the virus through
testing, isolation, and promoting precautionary measures
throughout the nation. The priority, rightly, of the winning
bidder of the first license to be issued (the Global Partnership
for Ethiopia), is to focus on ensuring the safety and wellbeing
of their own employees and in steering their company through
these unprecedented times. The ECA is well positioned to manage
this process in a transparent and fair manner and we have
continued working alongside our team of specialist advisors,
doing all that is required to prepare the groundwork for a
successful licensing round in these unprecedented times.
Effective telecommunications have a vital role to play in
disaster and risk management as well as in unlocking the
transformational power of the digital economy. Information
technology is needed to deliver early warnings and regular
public health information updates to citizens, and
telecommunications networks to allow for the fast and smooth
management of emergency communications. A reliable and
accessible telecommunications network would provide tools and
technology to assist our health workers in performing their
vital duties. We could also keep our healthcare providers safe
by enabling more people to work from home and help millions of
students to continue their studies through online learning
platforms. Introducing competition to the sector has never been
more important than the current moment. Effective
telecommunications are also core to the recovery of the economy
post pandemic and in driving the planned digital transformation
forward. ENDS