Ethiopia Weighs Third Telecommunication License to Break the M-Pesa/Telebirr Duopoly

The most significant land grab in African tech is currently happening in the Horn of Africa. For decades, Ethiopia was a fortress of state-owned isolation. Today, April 10, 2026, as the National Bank of Ethiopia (NBE) rolls out its National Digital Payments Strategy 2026–2030, the signal is undeniable: The Ethiopian government is preparing to award a third full-service telecommunications license. This isn’t just about adding a third signal to your phone; it is about injecting a new predator into a market where Ethio Telecom’s Telebirr and Safaricom’s M-Pesa are currently fighting for every centimeter of the digital wallet.

The “License B” Alpha

The ECA’s “License B” is the most coveted asset in the region because it is a Full-Service Mandate. Unlike the early days of liberalization, this license comes hard-coded with the right to provide Mobile Financial Services (MFS) from day one.

• The Global Suitor List: We are tracking expressions of interest from a “Titan” list including MTN, Orange, Etisalat, and Saudi Telecom (STC). * The $850 Million Benchmark: Safaricom’s original winning bid of $850 million remains the floor for the third license. However, in the 2026 economy, the price of entry is being weighed against Ethiopia’s Forex Stress—regulators are having to balance high license fees with the need for immediate foreign direct investment (FDI) to stabilize the Birr.

• The “Telebirr” Moat: State-owned Ethio Telecom isn’t sitting still. This week, they launched a Toll Road Payment System via Telebirr, moving aggressively into “Government-to-Person” (G2G) and utility payments to lock in users before the third player arrives.

The “National Digital Payments Strategy 2026”

The NBE’s new strategy, published this week, provides the “Rules of Engagement” for the new entrants. It shifts the focus from Access to Active Usage.

• The Interoperability Mandate: By Q4 2026, the NBE is mandating Full Interoperability via the “EthSwitch” gateway. This means a user on the new “Third Network” must be able to send money to a Telebirr or M-Pesa wallet as easily as an on-net transfer.

• The Remittance Alpha: On April 8, 2026, Ethio Telecom announced a strategic partnership with Mastercard to expand cross-border remittances. This is a direct shot at Safaricom’s “Visa Direct” partnership, signaling that the real profit in Ethiopian telecom is now in Global Liquidity.

• The Marketplace: Mobile money accounts in Ethiopia have surged from 12.2 million in 2020 to an estimated 139.5 million in 2025. The third licensee isn’t fighting for “New” users; they are fighting to Switch existing ones.

The “Special Economic Zone” (SEZ) Play

A quiet but critical signal emerged this week regarding Directive No. SBB/99/2026, which allows banks and telcos to operate with “Special Licenses” in SEZs.

• The Forex Gateway: Telcos operating in these zones can now provide Multi-Currency Liquidity. For a third licensee like MTN or Orange, these zones serve as a “Beachhead” where they can generate dollar-denominated revenue to offset the local currency risks of the wider Ethiopian market.

• The Corporate Edge: By targeting SEZ-based businesses first, the third player can capture high-value corporate accounts before attempting to compete with Ethio Telecom’s massive 75-million-strong retail base.

The “Execution Risk” vs. “Market Size” Paradox

• The Forex Bottleneck: While the market size is massive, the ability to repatriate profits remains the #1 deterrent for a third licensee. The NBE’s “Forex Stress” management in 2026 will determine if a global giant like Orange actually pulls the trigger on a bid.

• The Safaricom Lesson: Safaricom Ethiopia is still in its “Investment Phase,” proving that even with a world-class brand, breaking a state-owned monopoly’s retail loyalty is a multi-billion dollar, multi-year marathon.

Toward “Tri-Polar” Stability

By late 2026, we expect the ECA to finalize the shortlist for the third license. This will mark the transition of Ethiopia from a “Closed Fortress” to a Competitive Frontier.

Ethiopia is drawing a tight circle around its digital future. They are proving that in the 2026 economy, the “Titan” is the one who controls the Phone and the Bank simultaneously.

Index Report: Ethiopia Telecommunications Vitals (April 2026)

Sources & References

• Ethiopian Communications Authority (ECA): Expression of Interest for the Third Telecommunications License

• National Bank of Ethiopia (Apr 7, 2026): National Digital Payments Strategy 2026-2030 (Draft)

• Ecofin Agency (Apr 10, 2026): Ethio Telecom, Mastercard Move to Expand Payments Partnership

• The Kenyan Wallstreet (Apr 2026 Update): Safaricom’s Ethiopia Break-even Outlook and the Third License guide

The “Index” Take: The “Third License” is the final piece of the puzzle. Once Ethiopia has three competing digital wallets, the “Cost of Money” will drop, and the “Velocity of Capital” will explode. This is the moment Ethiopia truly joins the global digital grid.