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30 July 2020

Untapped treasures – Ethiopia welcomes investments in DTH, mobile 

Having spent several months working in Ethiopia, we cannot overstate the significance of the landmark launch of the country’s second premium DTH platform courtesy of French pay TV operator Canal+.

Ethiopia is a country of untapped potential like no other, where a government reticent to foreign influence has limited much of the population to basic FTA broadcast TV services, as well as a single incumbent – and incompetent – mobile network operator. However, it speaks volumes that in a country of over 110 million people, the second most populous country in Africa, there are only 4 million satellite TV households, while 16 million homes remain without TV services.

Coming in 2021 through a multi-year, multi-transponder deal with Eutelsat, Canal+ will deliver a DTH pay TV platform of 50 premium SD and HD channels, complemented by a mix of popular local Ethiopian FTA content.

Eutelsat claims it was already the leading carrier of Ethiopian channels, which is interesting considering that Canal+ is joining a party which began a few months back, with rival satellite fleet operator SES. Here, Ethiopia celebrated its first dedicated premium pay TV platform with the launch of DTH service Ethiosat in October 2019, featuring some of the country’s most popular channels, following an agreement between the Association of Ethiopian Broadcasters (AEB), the Ethiopian Broadcasting Corporation (EBC), and SES. This involved migrating popular channels to a new neighborhood hosted on SES NSS-12 at 57-degrees East, and also meant a total of 14 association members control over 50% of the country’s viewership.

EBC is wholly owned by the Ethiopian government, although interestingly it was founded by Emperor Haile Selassie and initially operated by British firm Thomson, given Selassie’s British connections.

DTH is essential in Ethiopia, given that fixed line infrastructure is virtually non-existent. It is a heavily mobile-first market, yet one with low mobile broadband penetration. In fact, the cellular situation in Ethiopia is even worse than TV. For now anyway, as Ethiopia’s mobile market could also be treated to a distinctly French flavor, with Orange floated as one potential bidder for a 40% stake in state-owned monopoly Ethio Telecom.

The arrival of Orange, or any one of the rumored parties bidding for a stake in Ethio Telecom for that matter, will bring transformative change to the entire country. The de-privatization of Ethio Telecom and subsequent expansion of network infrastructure will encourage innovation that has long been stifled in the country by monopolistic communications practices. For us, this will be more important in the long-term expansion of video in Ethiopia than the launch of these new DTH services.

For years, we have been waiting for African countries to show their hands as rising economies in OTT video, yet sluggish progress means it could be decades before video streaming begins closing the gap on DTH services across the continent. The infamous African exit by Netflix rival iflix in late 2018 was a poignant reminder of the scale of succeeding in OTT across this harsh continent. But with both Ethiopian DTH TV and mobile markets embracing foreign influence, the inevitable sea change in consumption behaviors across Africa will accelerate in the direction of OTT.

Ethiopia’s change of heart began in mid-2019 following government approval of legislation to allow competition and much-needed foreign investment. Beginning with the part-privatization of Ethio Telecom, the plan is to sell 40% in the monopoly incumbent and grant two new licenses to 12 participating international companies.

Orange is one of the interested parties, as part of a renewed push to expand on its strong presence in parts of Africa (mainly the Francophone north and west). But it will have stiff competition. Safaricom of Kenya is bidding as part of a consortium called Global Partnership for Ethiopia, with its major shareholders Vodafone and Vodacom (South Africa-based Vodacom is majority-owned by Vodafone, while Safaricom is 35% owned by Vodacom and 5% by Vodafone).

Other operators who registered bids are two other South Africa-based groups, MTN and Telkom; from the Gulf, Etisalat of the UAE and Saudi Telecom; plus Axian, Econet, Liquid Telecom and Snail Mobile. Two non-operators also registered bids – Kandu Global Telecommunications and Electromecha International Projects.

The majority of Ethio Telecom’s fixed and mobile network technologies to date have been delivered by ZTE and Huawei, including a new network monitoring platform to improve services, and there are also plans to launch a telecom satellite.

Ethiopia is slowly but surely opening its doors to outsiders – revealing treasures of huge potential if handled delicately. Subsequently, the government will remain on knife’s edge about relinquishing too much control to foreign companies. One wrong move could see the door slammed shut.