Ethio Telecom launches mobile money service TeleBirr

ETHIOPIATelecommunication company Ethio Telecom has announced the roll out of a mobile money service TeleBirr, which will be  available to its subscribers from May 2021.

The telco has made the move to consolidate its market dominance before the entry of new operators into the country.

The TeleBirr mobile money service will allow customers to send, receive and store money using their mobile phones and 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 TeleBirr wallet.

The telco secured approval by the Council of Ministers to engage in digital financial services.

The company started the process to launch digital financial services over a year ago after submitting a proposal to the National Bank of Ethiopia (NBE) which approved the application.

 “We will deliver the project in a very short period of time,” Ethio Telecom CEO Frehiwot Tamiru said.

Commenting on the development, the World Bank said Ethio Telecom has the most to gain from the expansion of the digital economy but warned that attempts by the government to shelter the company from competition in the provision of digital financial services is not good for the market.

Ousmane Dione, World Bank Country Director for Ethiopia, Eritrea, South Sudan and Sudan said the Ethiopian government has made policy pronouncements that seek to restrict the operation of digital financial services to Ethiopian firms and nationals only.

“A better strategy would be to encourage Ethio Telecom to compete on equal terms with the new market entrants in providing mobile money services without ownership restrictions”

Ousmane Dione – World Bank Country Director, Ethiopia

“But this may slow down innovation and investment are the market and may actually hinder Ethio Telecom’s own ambitions to attract strategic investment partner from abroad. A better strategy would be to encourage Ethio Telecom to compete on equal terms with the new market entrants in providing mobile money services without ownership restrictions,” said Dione.

Currently, Ethio Telecom has over 53 million mobile phone customers.

The move comes as Ethiopian Communications Authority (ECA) announced that it has received bids for two telecom licences.

 MTN Group confirmed that it is in partnering  with Silk Road Fund from China as equity partners in a bid for a telecoms licence in Ethiopia, Africa’s second most-populous country.

Kenya’s Safaricom  has also made a formal bid to get a licence to operate in Ethiopia, one of the world’s last major closed telecoms markets.

In a notice to shareholders, the telco said it is submitting its proposal through a consortium it is leading with its parent firms Vodafone and Vodacom, British development finance agency CDC Group and Japan’s Sumitomo Corporation.

Ethiopian authorities had told the Business Daily earlier that the Horn of Africa nation would award two telecom licences to multinational mobile companies next month after pushing forward the deadline in response to requests for extension from interested bidders.

It is still not clear whether the successful bidders will be granted licence to operate mobile money services.

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