The Ethiopian Communications Authority (ECA) has implemented price caps on termination rates to enhance competition in the telecommunications (telecom) sector. In a move stemming from a 2022 agreement between Ethio Telecom and Safaricom Ethiopia, mediated by ECA, termination rates for mobile and fixed services are reset to $0.0041 and $0.0026 per minute respectively, effective from May 1. The rates will gradually decrease over five years. ECA's adoption of cost-based termination rates aims to foster a level playing field, promoting competition and consumer benefits in the telecom market.
ECA's interest in promoting telecom competition aligns with its struggle to license a third operator and partially privatize Ethio Telecom. Despite opening bids for a third license last year, no offers were made, partly due to concerns about political instability. The government's plan to privatize Ethio Telecom, including selling a 45 percent stake and listing 10 percent on the local stock exchange, awaits fruition amidst challenges, including lack of investor interest.