The telecommunications market in Ethiopia is on the verge of massive growth, leading to a wide range of investment opportunities in telecommunications and downstream information and communications technology (ICT) segments, according to a new study published by Technology Strategies International in partnership with BroadGroup TMT Ventures. The report predicts that by 2011 the state-owned incumbent, the Ethiopian Telecommunications Corporation (ETC) will have a privatisation timetable in place, and that liberalisation of the mobile market will take place shortly after that.
"The Ethiopian Government recognizes that the country is being left behind in terms of digital inclusion, and urgently needs to address this if it wants to reap the benefits that other African countries have demonstrated from embracing ICTs," notes Christie Christelis, President of Technology Strategies International. "It may also become an important political issue in the next elections."
While the Ethiopian Government is on record saying that it will not hasten the liberalization process, and will not succumb to pressure from the international community to liberalize its banking and telecommunications sectors in order to accede to the WTO, Christelis believes that there is neither any reason for, nor any benefit from delaying the process further.
"Liberalization of the telecommunications environment will create a raft of ICT investment opportunities in Ethiopia," Christelis says. "The Chinese have already recognized the potential of Ethiopia and are building an electronics manufacturing facility to address the high growth expected in demand for handsets and accessories. They are also providing supplier financing in certain telecommunications investments in order to address the shortage of domestic capital."
The report predicts that over the next five years the number of mobile subscribers in Ethiopia will grow at an annual rate of 43% (CAGR), to reach almost 20 million subscribers by 2014.
Christelis added that Ethiopia will provide a range of excellent investment opportunities for foreign investors interested in the ICT sector, but warns that the window will not be open indefinitely. He predicts that the next four years will be critical in shaping the Ethiopian ICT sector's future and will provide high return opportunities for foreign investors that have the risk tolerance, and ability, to capitalize on the coming surge in ICT-related markets.