Ethiopia's suspension of a second telecoms operator permit will not delay Safaricom from launching the mobile money service this year, paving the way for the introduction of M-Pesa in the populous nation.

After winning the second telecoms operator permit, Safaricom's license was to be upgraded to include mobile financial services. Dr Eyob Tekalgn Tolina, the state minister of Ethiopia’s ministry of finance, said that it has delinked the M-Pesa permit from the second operator’s license and Ethiopia will keep its promise to Safaricom to give the Kenyan telco giant an M-Pesa license by May.

Last May, a consortium led by Safaricom secured the first license in Ethiopia. This license does not have a permit for mobile financial services like M-Pesa. The Horn of Africa nation sold only one of two full-service licenses on offer in May, citing a lower-than-expected price for the second one, which it wants to offer again.

The country is working to liberalize its telecoms sector in a bid to pivot to a modern, digital economy in line with reforms unveiled by Prime Minister Abiy Ahmed in 2018. The Ethiopian government is also preparing to sell a 45 % stake in Ethio Telecom, part of a broader liberalization that includes the auctioning of two new full-service telecoms licenses.

A mobile money service like M-Pesa, for example, could substantially improve Ethiopia's economy because it will enable people to bypass the country's inefficient banking system, and send money or pay at the touch of a button.

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