JOHANNESBURG, June 30 (Reuters) – Ethio Telecom has signed 4 million Ethiopians for a mobile money service launched in May, according to a document released by the Treasury Department as the government tries to sell a stake in the state-owned company.
The Telebirr service allows users to send and receive money, deposit or withdraw cash from named agents, pay bills, and receive cash from abroad, reflecting services that have spread to other parts of Africa where many people are have no bank accounts.
Ethio Telecom launched the service as the government seeks to sell a 40% stake in the company as part of a broader plan to liberalize its largely closed economy. A tender to sell the shares was published this month.
“Ethio Telecom’s mobile money services will provide a valuable opportunity to improve the financial inclusion of the bankless population,” wrote consultancy Deloitte in the share sale document posted on the Treasury Department’s website.
Telecom operators expanded mobile financial services across Africa after Kenya‘s Safaricom pioneered the idea of its M-Pesa service in 2007.
Only Ethio Telecom will be able to offer mobile financial services in Ethiopia, with its 115 million inhabitants and 19 commercial banks, as foreign mobile operators are legally excluded from participation.
Ethiopia’s telecommunications sector, one of the world’s last closed markets, has attracted investor interest, though some have been deterred by slow economic change and the risks associated with ethnic unrest and conflict in the Tigray region.
Ethio Telecom had approximately 54.7 million subscribers as of April, of which 43.7 million were active, Deloitte said. It had total assets of 79.8 billion Ethiopian birr ($ 1.83 billion) at the end of 2020.
The company posted gross profits of Birr 24.9 billion in the six months to the end of December 2020, with earnings before interest, taxes, depreciation and amortization of Birr 14.8 billion, the document says.
$ 1 = 43.6910 Birr reporting by Joe Bavier; Editing by Edmund Blair