MTN CEO Earmarks Ethiopia On MTN's Expansion Roadmap

The CEO of MTN, Rob Shuter is looking for new markets to conquer and has earmarked Ethiopia, Africa's second largest country by population following Nigeria, as a country that best fits the profile of a long-term strategic investment target.

In a recent interview with Bloomberg, Shuter said that he saw an excellent opportunity for MTN to lead the market in Ethiopia, which has more than 105 million residents.

In 2013, MTN was granted a value-added service licence in Ethiopia and opened an office in the capital city, Addis Ababa. But MTN, along with its rival, Vodacom, which also has an office in the country, were excluded from offering basic telecom service.

According to research done by Ovum, the mobile penetration in Ethiopia is approximately 25% lower than the average in Africa. This is mainly due to the national monopoly of the telecoms sector by the state-owned Ethio Telecom.

The country changed its policy in June last year when the EPRDF, Ethiopia's ruling coalition, announced that telecoms, among many other industries and sectors under national monopoly, would be opened for private investments from home and abroad.

The policy change in Ethiopia might have piqued the interest of multinational telecom operators, which are already players in Africa's main markets.

Shuter told Bloomberg that there aren't many opportunities for MTN to increase its scale in Africa because it is already present in the two largest markets (South Africa and Nigeria), most of the medium-tier nations and also in some of the smaller markets.

MTN operates in 22 countries throughout Africa and the Middle East and has over 236 million customers.

Orange, another major player in the African market, may also be tempted to re-enter the Ethiopian market. Under its previous brand, FT-Orange, the operator was in charge of Ethio Telecom from 2010 to 2012.

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