After a series of negotiations and deliberations, Ethio Telecom has finally been given a greenlight by the National Bank of Ethiopia (NBE) to start mobile money services.
Since 2019, Ethio Telecom has been in talks with NBE, which is the Central Bank of Ethiopia, to get a license to launch a mobile banking service. The marathon negotiations have finally bore fruit.
Some of the directives prior to launching the mobile money service include:
- Transactions are only performed through mobile phones after customers deposit funds with an agent
- A bank to act as trust account for deposited funds
Speaking about the new strategic business unit that will manage the mobile money service, Frehiwot Tamiru, CEO, Ethio Telecom, said:
“The new business wing will be regulated by the NBE not by the Ethiopian Communication Authority (ECA).”
Currently, foreign firms are not allowed to engage in mobile money services in Ethiopia. According to an NBE directive, only Ethiopian nationals and Ethiopian diaspora can engage in mobile financial transaction services.
The ECA is in the process of licensing two foreign telecom operators. These will however not be allowed to engage in mobile money services, at least for the next three years before the financial reform program.
The Ethiopian mobile money service is expected to generate up to $13 billion by 2025 making it a lucrative opportunity for Ethio Telecom.
The latest report shows the telecom now has a total subscriber base of 46.2 million which is an increase of 5.8% from the previous year.
Ethio Telecom stats currently are as follows:
- Total service subscribers – 46.2 million
- Mobile voice subscribers – 45.8 million
- Internet and data subscriptions – 24.3 million
- Tele density – 47%
- Population coverage – 95%
- Geography coverage – 85.4%
While Kenya and Ghana dominate mobile usage in Africa, the huge population of Ethiopia, now at over 110 million, is expected to be a huge market that will see mobile money usage in Ethiopia grow quickly.
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