Introduction
In April 2018, on the wave of mounting popular pressure for political change in Ethiopia, the ruling Ethiopian People's Revolutionary Democratic Front (EPRDF) party selected Abiy Ahmed as its new leader and the country’s prime minister. The new prime minister promised a new era of political and economic openness, pledging to do away with political repression and to reduce the state’s role in the economy.On the heels of Abiy Ahmed's re-election as PM, this commentary offers insights into how these promises have panned out over the past years by focusing on developments in the telecommunications sector. This sector was chosen as a case study due to its relevance economically, i.e. as an enabling sector for the economy more at large, as well as politically, i.e. as a channel through which the state can crack down on political freedoms. The analysis draws on publicly available sources, including World Bank assessments, reporting by Ethiopian and international media and press freedom indices. Overall, the analysis shows that earlier promises of political and economic opening have remained largely unfulfilled, as the state has continued to use its power to retain commercial advantage in and political control over the telecom sector.
The liberalization of the telecom sector
In 2021, the Ethiopian government opened its telecom sector to private investment trough a competitive bidding process. The Global Partnership for Ethiopia, a consortium led by Safaricom including e.g. Vodafone, Vodacom, British International Investment and Sumitomo Corporation won the license with a bid of 850 million USD. The consortium launched commercial operations in October 2022 under the name Safaricom Ethiopia. The International Finance Corporation (IFC) subsequently invested 257 million in the venture, with the World Bank’s Multilateral Investment Guarantee Agency (MIGA) providing a USD 1 billion guarantee. The result was a market with two key companies. Ethio Telecom, the state-owned enterprise (SOE) that held a monopoly over Ethiopia’s telecom sector for decades, and Safaricom Ethiopia, the first private operator. Ethio Telecom has over 80 million customers and control over the entire transmission infrastructure in the country. Safaricom, the Kenyan company behind M-PESA, has been a successful telecoms operator in Kenya. Since entering Ethiopia, Safaricom Ethiopia has reached 15 million customers in June 2026.
While there was a lot of optimism (both inside and outside Ethiopia, including from the IFC) about the potential impact of this liberalization process, the outcomes have turned out to be rather disappointing, both economically and politically - as the next sections show.
The economic story: Increased efficiencies but unfair competition
Ethiopia’s telecom liberalization has yielded some positive economic outcomes. For instance, following Safaricom’s entry into the Ethiopian market, the cost of its mobile data services has fallen by up to 70%. Moreover, network coverage has expanded with the construction of 2,500 new cell towers.
Nevertheless, despite the liberalization, the sector suffers from a highly uneven playing field. Ethio Telecom continues to dominate the sector, amidst limited enforcement of pro-competition regulations. In April 2023 the Ethiopian government required all fuel payments to be exclusively processed through Telebirr, Ethio Telecom’s mobile money app. The move came a few weeks before Safaricom received a license for its mobile money application M-PESA. Although fuel payments represent only a small fraction of overall mobile money transactions, this decision further strengthened the headstart enjoyed by Telebirr. While by May 2025 M-PESA became integrated into Ethiopia’s digital fuel payment system, by then Telebirr had already processed 233 billion birrs in fuel transactions in 2023/2024 and counted 58 million users, a customer base built over several years (for comparison, M-PESA’s user base has reached 5.2 million in 2026).
Another example of state interference concerns M-PESA. Its concerns regarding unfair competition dynamics surfaced again in December 2025, when Safaricom's new M-PESA Lehulum app was blocked on Ethio Telecom's mobile network, even though it had been designed to operate across all networks. Following the blockage, it has been reported that the issue has been part of top-level political talks between the Ethiopian and Kenyan government. The blockage has recently been resolved.
Safaricom has also faced significant barriers in accessing shared infrastructure. While it is reasonable for Ethio Telecom to charge for access to infrastructure it has built and invested in, the World Bank's 2025 Ethiopia Telecom Market Assessment found that access was either blocked or offered at rates elevated beyond cost-oriented pricing, forcing Safaricom to build 60% of its network sites independently at a total investment exceeding 2.6 billion USD.
Overall, these practices undermine the level playing field that the reforms are supposed to deliver and defeat the advantages that healthy competition can have for the broader population, namely better quality of services at a more affordable price.
The political story: The telecom sector as a tool of political control
The Ethiopian state has often abused its control over the telecom sector by shutting down networks during conflict and periods of political instability. By entering the sector, Safaricom has become structurally embedded in its political dynamics as well.
The most evident example is that of the state shutting down telecommunications for political or military reasons. For instance, when the Ethiopian state declared a state of emergency in Amhara in 2023, Safaricom was forced to shut down 500 towers, covering nearly a fifth of its entire network. This is part of a broader pattern of government-enforced shutdowns. Between 2020 and 2024, the state shut down internet access in Tigray for 787 days, in Amhara for nearly a year, and in Oromia during active combat in 2024, each time to enforce a military or political information blackout. In active conflict zones in Oromia and Amhara, telecom infrastructure also regularly risks physical destruction by armed militias such as the Fano and the Oromo Liberation Army.
Debates about state power in the telecom sector are particularly salient at a moment in which the Ethiopian government is once again stepping up its repression of dissenting voices, after the temporary easing of political repression that characterized the early days of Abiy Ahmed’s rule. In July 2024, for instance, the government revoked the registration of 1,504 civil society organizations, officially based on ‘’administrative reasons’’. In parallel, Ethiopia's press freedom has deteriorated continuously in the last three years, according to analysis by Reporters Without Borders, which labeled the country’s press freedom situation as 'very serious'. The general elections of 1 June 2026 provided the most recent evidence of this pattern, as journalists came under increased pressure and media licenses were revoked.
When it comes to political risks, the World Bank’s MIGA guarantees insured investors against the risk of war and government seizure of assets. However, they did not include measures to prevent the Ethiopian state from shutting down networks during conflicts, revoking the licenses of independent media, or dismantling the civil society organizations that might have held it to account.
Conclusion
The experience of the liberalization of Ethiopia’s private sector shows that the promise of political and economic liberalization heralded in the early days of Abiy Ahmed’s rule have faced serious limitations. Although the Ethiopian state did open the telecom sector to foreign companies, it continued to use its power to favor its own state-owned business, as well as to support its political and military fight against domestic opponents. This analysis has important implications for the foreign actors supporting Ethiopia’s liberalization process. The World Bank supported Ethiopia’s reform process, as well as Safaricom’s entry into the country through an IFC investment and a MIGA guarantee. However, the analysis shows that not enough conditions were put in place to ensure that the Ethiopian state would adhere to its commitments in terms of fair economic competition and limit its abuse of power in the sector for political and military purposes. As of June 2026, the IFC is negotiating a new loan up to USD 150 million for Safaricom Ethiopia. However, more funds without any conditions to change these two critical problems risk entrenching the status quo, rather than promote change.