NEBE Gives Green Light to Ethioteleco to Start Mobile Banking

After negotiations that lasted for more than a year, the National Bank of Ethiopia (NBE) has given Ethiotelecom the go ahead to launch its mobile banking service. The decision was announced on October 3rd and is the conclusion of lengthy negotiations between the two entities. Frehiwot Tamiru, CEO of Ethiotelecom announced the conclusion of negotiations during a consultative meeting with IT and start-up companies.

The directive by NBE was designated as the Licensing and Authorization of Payment Instrument Issuers. It allows customers to undergo transactions on mobile phones after an amount is deposited with an agent. The logistics of this service will be handled by a strategic business unit that Ethiotelecom plans on establishing. All regulatory responsibilities of the new wing will be handled by NBE instead of by the Ethiopian Communication Authority (ECA) according to Frehiwot Tamiru.

Foreign entities, however, are not allowed to use this service. To some, the topic of foreign involvement was seen as an issue to be thoroughly researched and defined given that Ethiotelecom is in the process of licensing two foreign telecom operators and that there is an international firm that is set to acquire a stake in the company. Some participants at the meeting expressed concerns that this barring of foreign firms from participation may lead to Ethiotelecom losing clients due to the superior competition that these firms bring.

Addressing these concerns Frehiwot Tamiru assured those at the meeting that over the past two years the organization has been preparing to compete at a global scale. Balcha Reba, director of the ECA, told The Reporter that these issues are not as problematic since the organization plans to review the involvement of foreign entities in three years’ time after which there is a financial reform program in the works.

“Ethiotelecom is reborn. We are witnessing a new company on the rise”, were the words of one of the attendants used to describe the new mobile banking service as well as the various other reforms being undertaken by the organization. This was the prevailing sentiment at the meeting with both local IT companies and startups affirming their desire to work in partnership with Ethiotelecom. Frehiwot Tamiru echoed this desire and said that developing local content should especially be the current focus of any prospective partnerships given the lack of telecom jobs in the nation.

News Source: Ethiopian Reporter (Ethiopian Reporter)

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