Thursday, May 23, 2024

    Ethiopia cuts mobile termination rates opening up Africa’s second most populous country

    Ethiopia's ECA cuts termination rates by 26% with more to come as the second most populous African country's telecoms market liberalises further – and opportunities abound

    Ethiopia’s telecoms regulator The Ethiopian Communications Authority (ECA) has cut mobile termination rates for the next five years to encourage more competition in the country’s telecoms market.

    The ECA has cut the rate to 0.23 Ethiopian Birr (US$0.004) per minute from ETB0.31 ($0.005) per minute, a 25.8% reduction and the cut will be effective from 1 May 2023 and will run until April 2025, when a further undisclosed drop will be applied.

    The move also follows a cost study done by the regulator called “Determination of Significant Market Power (SMP) and Interconnection Rates.” The study was aimed at levelling the playing fields between the country’s operators, creating an environment where they can compete fairly.

    The ECA said the new termination rates are a price cap, which means that all mobile and fixed telecoms operators have the freedom to negotiate interconnection rates that are lower.

    “By ensuring that rates are set based on the costs of providing services, the intention is to promote competition among operators, prevent anti-competitive behaviour, and encourage a market structure that benefits consumers by offering them a variety of choices and competitive prices,” the regulator told African news publication ConnectingAfrica.

    Learn more from ConnectingAfrica’s report here

    According to sources, the move stems from a 2022 interconnection agreement between state-owned telco Ethio Telecom and Safaricom Ethiopia that was mediated by the regulator.

    Ethiopia is Africa’s second most populous nation and the move could see not only lower costs for users in the country and across the continent but could also open up Ethiopia to a raft of new telemedia services.

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