Ethiopia must pursue telecoms reforms to advance digital inclusion: World Bank

A World Bank report has recommended that the Ethiopian government must undertake urgent regulatory and policy reforms in its telecommunications sector in order to better deliver on its full potential for digital inclusion and the growth of the digital economy.

This is among the suggestions contained in the Ethiopia Telecom Market Assessment Report published by the World Bank Group.

The Bank acknowledges the progress recorded since the government decided to partially liberalize the telecoms sector in 2018. It however points out that the reforms must be accelerated in order to obtain more meaningful results given that the telcoms sector contributes substantially not only to the country’s GDP, but also employment and tax revenue.

Among other things, the report calls on the government to make the playing field level for both the state-owned Ethio Telecom and Safaricom Ethiopia which was given the greenlight to operate in the country in 2021 after obtaining a license for $850 million.

Some of the reforms, the World Bank says, have led to gains such as a rise in mobile money services through deregulation, an increase in mobile subscriptions which doubled from 44.2 million in 2018 to 87.6 million in 2024, the putting in place of an independent sector regulator, the licensing of new internet service providers, and the introduction of infrastructure-sharing agreements.

Despite these and many other achievements, the report holds that the Ethiopian government has to make sure the playing field is level enough for the two telcos, and also consider allowing space for the entry of a third player. To do this, the government has been told to relax some of its control over Ethio Telecom and to ensure that equal regulatory treatment is given to all operators.

On another note, the report recommends more open access to shared telcoms infrastructure by putting in place a cost-oriented pricing, and develop new cost models and interconnection agreements. Infrastructure-sharing is enhancing connectivity in some African countries.

The need to address market dominance by Ethio Telecom through regulatory transparency is also recommended in the report, and reforms in digital financial services are also highlighted.

Although mobile subscriptions have doubled in the past seven years, the World Bank notes that the digital divide in the country still remains wide as more than 40 million citizens remain uncovered by 4G mobile connectivity. In addition, issues like slow band speed, pricing wars and investment constraints remain glaring.

Ethio Telecoms is already a major player in Ethiopia’s digital transformation, especially in the rollout of the Fayda digital ID which is a major pillar in the Digital Ethiopia 2025 strategy and the 2025-2030 Digital Government blueprint. It is also hoped that more government reforms could strengthen the telco’s contributions to the country’s digital economy.

Thanks to connectivity, Ethiopia has also successfully launched a digital government platform dubbed MESOP which already has more than 900 services onboarded to it.

Article Topics

digital identity  |  digital inclusion  |  Ethiopia  |  telecom  |  World Bank