More Africa NewsDjibouti Telecom: one of the last telecom monopolies in Africa is on the verge of disappearing

July 14, 2021by myles0

After Comoros and Ethiopia, Djibouti has also just accepted the entry of a private investor into its telecoms market. A strong decision, bearing many hopes for national development.  

The Djiboutian government approved during the Council of Ministers on Sunday July 11 the opening of the capital of its incumbent operator Djibouti Telecom. With this decision, he initiated the disappearance of one of the last telecoms monopolies in Africa. In 2015, there were only four telecom monopolies left in Africa. The Comoros finally opened the market to Telma in 2016, Ethiopia copied the same example on May 22 with Vodafone. With Djibouti Telecom which will soon open its capital, Eritrea will remain the only telecoms monopoly on the continent.

Created in 1999, Djibouti Telecom, which operates in a market without competitors, only succeeded in raising the penetration rate of mobile to 43.5% and Internet to 55.7% according to data from the Digital Report 2021 of Hootsuite and We Are Social. While telecommunications are today at the heart of several development issues, the Djibouti government believes that increasing the expertise of the incumbent by bringing in an experienced partner will further develop the sector. ”  This ambitious operation must result in positive spinoffs for the citizens and businesses of Djibouti: optimization of the operator’s offer and services, access to voice and data services at the best international standards, among others  “, states the operator. Djiboutian government.

Since 2019, the World Bank has encouraged Djibouti to open its telecoms market to competition. In its report “Welfare effect of introducing competition in the telecom sector in Djibouti”, the international financial institution considers that such an operation is likely to improve the living conditions of the populations and the national economy. According to the World Bank, a 10% increase in broadband penetration increases gross domestic product (GDP) by 1.38%. In the Comoros, the opening of the market to competition has allowed the Internet penetration rate, which was 10% in 2017, to climb to 16% in 2018 and then 20% in 2020 according to Hootsuite and We Are Social.

Although the option chosen by the Djibouti government is different from the solution recommended by the World Bank, it nevertheless introduces, within the incumbent operator, a different vision capable of guiding the telecoms company towards better decisions in terms of ‘investments and governance. The government wants to make Djibouti Telecom one of the major players in the country’s digital transformation.

Source: Agence Ecofin

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