Ethiopia holds an important position in Africa due to its strategic location in the Horn of Africa, bordering countries such as Sudan, South Sudan, Kenya, Somalia, and Eritrea. It is the continent's second-most populous nation and has the tenth-largest land area in Africa. Additionally, Ethiopia is known for its rich and diverse cultural heritage, as well as its vast reserves of natural resources such as gold and tantalum.

The ICT sector in Ethiopia has been growing rapidly in recent years, with the government making significant investments in infrastructure and regulatory reforms to support the development of the industry. The country has a relatively large population of just over 126 million people, which presents a significant market opportunity for technology companies.

The Ethiopian government has set ambitious goals for the sector, with the aim of becoming a middle-income country by 2025, largely driven by the ICT industry. The country has also implemented a national ICT policy and strategy that aims to increase access to technology and develop the local industry.

In terms of infrastructure, Ethiopia has made progress in recent years, with the government investing in fiber optic networks, satellite technology and data centers. However, there are still challenges to be addressed, including low internet penetration rates and limited access to finance for local entrepreneurs.

Despite these challenges, there are many opportunities for technology companies in Ethiopia, particularly in areas such as e-commerce, mobile payments and digital content. The country has a growing population of tech-savvy youth and a burgeoning startup scene, which is attracting investment from both domestic and international investors.

Primary Operators

The main telecom operators (listed below) compete against each other in Ethiopia’s telecom sector, with ZTE Corporation, Ericsson, Nokia and Huawei serving as the country’s major vendors.

Ethio Telecom: Established in 2010, Ethio Telecom is a state-owned telecommunications company and the only operator of fixed-line telephone services in Ethiopia. It also offers mobile phone, internet and data services. Subscribers to its mobile phone-based financial service, “Telebirr” (developed and launched by Ethio Telecom in 2021), grew to 27.2 million out of its 70 million total subscribers.

That was up from 21.8 million subscribers in June 2022.

Moreover, state-owned operator Ethio Telecom launched a 5G mobile phone service in an effort to stay ahead of competition from new entrants in an industry that has historically been closed to international players. Next-generation 5G networks can provide data speeds at least 20 times faster than 4G and are seen as important for emerging technologies like self-driving cars. Additionally, the networks can enable communication and interconnectivity between smart devices.

MTN Ethiopia: MTN Ethiopia is a telecommunications company that is a subsidiary of MTN Group, a South African multinational mobile telecommunications company. MTN Group won a license to operate in Ethiopia in 2020, becoming the first non-state telecoms company to secure a telecoms license in the country.

MTN Ethiopia launched its mobile services in May 2021. The company has said that it plans to invest $1.5 billion in its network infrastructure in the country over the next five years and aims to cover 90% of the population with its services. MTN Ethiopia's launch has been seen as a significant development in Ethiopia's telecommunications market, which had previously been dominated by the state-owned Ethio Telecom. The entry of MTN and other foreign operators is expected to increase competition in the market and lead to improvements in the quality and affordability of telecommunications services in Ethiopia.

Vodafone Ethiopia: Vodafone is a British multinational telecommunications company that entered the Ethiopian market in 2021, becoming one of the first non-state telecom companies to secure a telecoms license in the country. The company has said that it plans to invest $850 million in Ethiopia over the next decade and aims to cover 80% of the population with its services.

Orange Ethiopia: Orange Ethiopia is a subsidiary of the French multinational telecommunications company Orange, which provides mobile telecommunications services in Ethiopia. Orange Ethiopia was launched in 2018 after the company secured a license to operate in the country. It offers a range of mobile services, including voice and data plans, SMS and value-added services. The company has also introduced innovative services such as Orange Money, a mobile money transfer and payment service that allows customers to send and receive money, pay bills and purchase airtime. Orange Ethiopia has around 20 million subscribers and is the second-largest mobile operator in the country after Ethio Telecom. The company has invested heavily in expanding its network infrastructure to provide reliable and high-quality services to its customers.

Safaricom Ethiopia: Safaricom Ethiopia is a subsidiary of the Kenyan telecommunications company Safaricom, which was awarded a license to operate in Ethiopia in 2021. The license was given as part of the Ethiopian government's plans to liberalize the country's telecommunications sector and introduce competition to the market.

The company has set a target of reaching 25 cities and 25% of the Ethiopian population by April 2023. As of January, 21 cities were already covered by its network. While it still lags quite a distance behind incumbent Ethio Telecom, the rapid adoption of Safaricom’s services is a testament to the strong potential of the Ethiopian telecom market and the room for growth that remains.

Internet Use Landscape in Ethiopia

Ethiopia has experienced significant growth in connectivity in recent years, particularly in the mobile telecommunications sector. The Ethiopian government has prioritized the expansion of telecommunications infrastructure as part of its efforts to modernize the country's economy and improve access to information and communication technology (ICT) services.

According to Kepios’s analysis, there were 20.86 million internet users in Ethiopia in January 2023, with a penetration rate of 16.7% of the population. The figures reveal an increase of 520 thousand internet users (+2.6%) between 2022 and 2023. However, the numbers also indicate that the vast majority of the population, about 83.3%, or 104.1 million people, did not have internet access at the beginning of 2023. Ookla's data suggests that the median mobile internet connection speed in Ethiopia increased by 38.0% to 19.10 Mbps, while the fixed internet connection speed increased by 56.8% to 5.19 Mbps in the twelve months leading up to 2023.

In Ethiopia, the number of cellular mobile connections increased to 66.80 million in January 2023, according to the GSMA, which represents a 17.8% increase, or 10 million more mobile connections, compared to the previous year. However, it's worth noting that many individuals use multiple mobile connections, so the total number of mobile connections can exceed the total population. With this in mind, GSMA's data shows that mobile connections in Ethiopia were equivalent to 53.5% of the total population in January 2023.

In addition, as of 2023, there are 6.4 million social media users in Ethiopia, according to recent data. While this number is equivalent to 5.1% of the total population, it's worth noting that these users may not represent unique individuals. Further data from social media platforms' ad planning tools indicates that 6.15 million users aged 18 and older were using social media in Ethiopia at the start of 2023, representing 9.2% of the population aged 18 and above. Meanwhile, 30.7% of the country's total internet user base used at least one social media platform in January 2023, with the overall gender split among social media users at 34.1% female and 65.9% male in the country.

These figures indicate that while Ethiopia is still lagging behind some other African countries in terms of internet adoption, there has been a steady growth in the number of internet and mobile users in recent years. With the government's efforts to expand internet infrastructure and improve access, it is expected that Ethiopia's digital landscape will continue to evolve rapidly in the coming years.

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