With population of 120+ million, Ethiopia is one of the fast-growing economies in Africa and a destination for technology and telecom firms looking to penetrate this market and expand their business operations, while it struggles to catch up with rest of the Sub Saharan market.
The push for smart city initiatives has spurred the development and adoption of digital platforms in Ethiopia.
Ethio Telecom and the Addis Ababa city administration have collaborated to build a smart city in Addis Ababa.
According to ResearchAndMarkets.com, the Ethiopian data centre market is expected to reach a value of $226 million by 2028 from $95 million in 2022..
An important milestone was reached in July 2023 when a memorandum of understanding was signed between Ethiopia and South Korea to embark on a smart city project in Ethiopia.
Data centre development in Ethiopia has gained momentum with investments from notable operators like Raxio Data Centres and Safaricom, marking a steady growth trajectory for the country’s data centre infrastructure.
The push for smart city initiatives has spurred the development and adoption of digital platforms in Ethiopia. Collaborations such as the one between Ethio Telecom and the Addis Ababa city administration to build a smart city in Addis Ababa underscore this digital transformation.
According to ResearchAndMarkets.com, the Ethiopian data centre market is expected to reach a value of $226 million by 2028 from $95 million in 2022, growing at a CAGR of 15.54% from 2022-2028.
An important milestone was reached in July 2023 when a memorandum of understanding was signed between Ethiopia and South Korea to embark on a smart city project in Ethiopia.
In terms of connectivity, Ethiopia is gearing up for the expansion of 4G and 5G networks, with telecom operators like Ethio Telecom committed to enhancing service quality to meet the growing demands of end-users. For instance, in June 2023, the World Bank made significant investments in Africa to support Safaricom Ethiopia in building and operating advanced 4G and 5G mobile networks.
The government has ambitious plans to generate over 35,000 MW through geothermal energy by 2037. wingu.africa, for instance, inaugurated its inaugural facility in Addis Ababa, boasting an impressive 161 thousand square feet of space and a power capacity of approximately 10 MW when fully developed. Addis Ababa has emerged as the preferred location for major investments from colocation service providers like wingu.africa and Safaricom.
However, Ethiopia lags the rest of the Sub Saharan market in ICT. According to US based International Trade Administration, the current contribution of the communication sector to GDP is approximately 2%, compared with average 4% in the East Africa region. Ethiopia’s wireless penetration stands at 58%, as compared to the Sub-Saharan average of 75%. Fixed and mobile line telephone density was 1% and 58%, respectively, in 2021-22.
Networking investments
In September last year, Liquid Intelligent Technologies, a business of Cassava Technologies, a pan-African technology group, announced the launch of fully redundant terrestrial routes, from Kenya to Ethiopia and Zambia to Malawi. This significant achievement will allow for greater efficiency and reliable regional connectivity, both key to the economic development of these countries.
Spanning over 1,000 km, the fibre link between Kenya and Ethiopia offers businesses in Ethiopia access to data centres and cloud in Nairobi, Kenya, ensuring that data does not leave the continent. In addition, this link is further supported by the cross-border 711 km link between Zambia and Malawi, providing a direct and reliable connection to content caches and data centres in South Africa.
In partnership with the Kenya Electricity Transmission Company and Ethiopia Electric Power, Liquid’s new link connects Nairobi and Mega, a town in southern Ethiopia, and provides a capacity of 4Tbps. Complementing the existing terrestrial routes across this border, the Kenya-Ethiopia route will now have carrier-grade connectivity, which serves to rapidly expand data traffic on this important route.
The fibre network will provide Kenya and Ethiopia with measurable benefits in terms of connectivity performance and accessibility as it connects the underserved towns of Suswa, Sereolipi, Ndaragwa and Marsabit, as well as Nairobi and Mega.
The market for digital payments is growing steadily in Ethiopia, as increased customers gain better access to e-commerce sites and want to shop from their mobile devices. The number of e-commerce consumers in Ethiopia is projected to reach 44.2 million users in 2025. This means issuers need to set up robust payment processing systems which allow smooth and secure communication of data between issuers, merchants and acquirers.
IT announcements
In May, last year, Tetra Tech, provider of high-end consulting and engineering services, announced that the US Agency for International Development, Ethiopia Mission has awarded the company a $48 million, single-award contract to develop a comprehensive learning platform that will apply predictive analytics to monitoring data to inform programming decisions.
Under the five-year contract, Tetra Tech’s data scientists will apply various research modelling methods to promote innovative data collection, analysis, and interpretation through the learning platform. Tetra Tech will integrate new and existing data sets into the platform to enable USAID and its stakeholders to make prompt evidence-based decisions and improve program outcomes through adaptive management.
In March last year, Zemen Bank, a commercial bank based in Addis Ababa, wanted to offer easy online payments to its customers without compromising on security. The bank is known for its service excellence, innovation and pioneering new products and adopting new services. They engaged with Netcetera, to allow them to take off in the African payments market and offer customers a seamless online payment experience.
Netcetera’s Access Control Server allows Zemen to authenticate cardholders online with multi-factor authentication and prevent fraudulent payments. Together they worked to onboard customer cards and are now enabling Zemen Bank customers to make simple, secure e-commerce transactions with all payment card schemes, while ensuring the highest level of security for financial data. ACS functionality will be available to Zemen Bank customers in March.