Mobile money finally comes to Ethiopia

Mobile money finally comes to Ethiopia

Ethio Telecom, the – for now – monopoly telecommunications provider in Ethiopia, has announced the roll-out of a mobile money service.

Called TeleBirr, it will be available to Ethio Telecom subscribers from May this year.

Although the government is planning to allow two new operators to compete with Ethio Telecom, they won’t be permitted to offer mobile money services. Ethio Telecom, by contrast, has the approval of the country’s Council of Ministers to offer digital financial services. The process apparently began over a year ago with a proposal to the National Bank of Ethiopia, which approved the application.

It’s a reasonable guess therefore that Ethio Telecom has decided to launch the new services soon to help it boost customer loyalty before new operators arrive.

According to the ITWeb Africa site, the TeleBirr mobile money service will allow customers to send, receive and store money using their mobile phones. Customers will be able to pay for goods, services and utility bills, as well as receive money from people in the diaspora, access loans and link bank accounts to a TeleBirr wallet.

While this move is probably long overdue, the deliberate restriction of mobile money services to one player is unlikely to be viewed favourably by some groups, and indeed the World Bank has apparently warned that the lack of competition in the provision of digital financial services is not good for the market.

By contrast a monopoly position in mobile money services may enhance Ethio Telecom’s attractiveness to investors when the forthcoming sale of a 45 percent stake in the operator takes place.