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BMI View: We maintain a largely subdued outlook for the three markets surveyed in this report: Eritrea, Ethiopia and Djibouti. A ll three of these markets display growth potential, but market development dynamics have been hampered by poor government policies and state-owned monopolies that have been unable to successfully develop the markets. Djibouti, Ethiopia and Eritrea share certain common characteristics including low penetration rates, a low rate of technological uptake, government-backed sole-services providers and the absence of healthy competition necessary to drive the market forward. Ethiopia, the largest of the three, has witnessed the government actively invest into ne twork infrastructure upgrades to Ethio Telecom as consumers have long complained about poor quality and high costs. We believe that market liberalization and competition are crucial elements that will unlock the true growth potential in these markets. Nevertheless, it currently appears that these markets will remain closed. W e presently remain most optimistic about Ethiopia as the government ' s tenders begin to bear fruit.
|Poor Government Intervention Hampers Growth|
Latest Updates & Industry Developments
We are hopeful that the Ethiopian government's ambitious investments into developing the infrastructure capabilities of the Ethio Telecom will prove fruitful in terms of organic subscriber growth and 3G uptake. Chinese firm ZTE has actively been working on improving both the wireless and fixed national infrastructure in the country.
Telecoms sector growth in Ethiopia, Djibouti and Eritrea remains depressed and subdued due to lack of competition, poor governance policies and state-owned monopolies that have been unable to foster market growth.