Huawei-Built Mobile Money Platform, Telebirr, Launches in Ethiopia Amidst Pursuit of Cashless Economy

On May 11, Ethiopia’s state-owned telecom­mu­ni­ca­tions com­pa­ny Ethio Tele­com launched the country’s first mobile mon­ey plat­form, TeleBirr, which was devel­oped by Huawei.  The new mobile app will allow Ethio Tele­com cus­tomers to send, store, and receive mon­ey through their tele­phone num­ber.  State-owned Ethio Tele­com, which has a monop­oly over Ethiopia’s telecom­mu­ni­ca­tions ser­vice, expects TeleBirr to facil­i­tate 40–50% of Ethiopia’s total eco­nom­ic activ­i­ty in the next five years.  The new mobile ser­vice is part of an effort to build a cash­less econ­o­my.

TeleBirr is reflec­tive of a broad­er effort by Huawei to estab­lish itself as a grow­ing pres­ence in Africa’s nascent mobile pay­ments sec­tor.  Huawei mobile mon­ey ser­vices have been launched in 19 coun­tries, includ­ing Kenya, Ghana, Lesotho, Tan­za­nia, and the Demo­c­ra­t­ic Repub­lic of Con­go.  These ser­vices report­ed­ly rep­re­sent approx­i­mate­ly 22% of reg­is­tered emerg­ing mar­ket mobile mon­ey accounts.

The devel­op­ment of the mobile plat­form also comes after Huawei has pub­licly expressed inter­est in addi­tion­al involve­ment in the Ethiopi­an mar­ket, cit­ing the coun­try’s ris­ing impor­tance on the con­ti­nent, a fact that has also attract­ed oth­er Chi­nese tele­com com­pa­nies. As per cur­rent Ethiopi­an law, only Ethio Tele­com can pro­vide mobile finan­cial ser­vices.  For­eign com­pa­nies are barred from oper­at­ing in this space, despite Huawei’s role in deliv­er­ing the end-to-end solu­tion that is being used by Telebirr.  Huawei report­ed­ly con­fig­ured the asso­ci­at­ed hard­ware, soft­ware, and data stor­age capa­bil­i­ty for its deployment.

Despite the mount­ing secu­ri­ty con­cerns asso­ci­at­ed with Huawei, the Chi­nese com­pa­ny has main­tained a strong mar­ket pres­ence in Ethiopia’s infor­ma­tion and com­mu­ni­ca­tion tech­nol­o­gy (ICT) sec­tor, as Ethio Telecom’s pri­ma­ry ven­dor.  Huawei, along­side ZTE Cor­po­ra­tion, was crit­i­cal to the “dra­mat­ic expan­sion of Ethiopia’s tele­com infra­struc­ture” in the ear­ly stages of its development.

The launch of TeleBirr has come along­side Ethiopi­an Prime Min­is­ter Abiy Ahmed’s call to lib­er­al­ize Ethiopia’s tele­com indus­try, with the gov­ern­ment plan­ning to sell a 45% stake in Ethio Tele­com, in an effort to dou­ble its mobile tow­ers (esti­mat­ed to cost $1.1 bil­lion), sell two oper­at­ing licens­es, and extend its fiber-optic net­work. Chi­nese tele­com oper­a­tor Shar­ing Mobile Group expressed inter­est in join­ing the bid for the 45% stake in Jan­u­ary 2021.  The firm claims to have acquired 80% of Niger­ian tele­com oper­a­tor GiCell for $200 mil­lion in April 2016, rep­re­sent­ing the first acqui­si­tion of an over­seas tele­com oper­a­tor by a pri­vate Chi­nese tele­com corporation.

Shar­ing Mobile was wide­ly expect­ed to bid for one of the two oper­at­ing licens­es offered by Ethiopia but was not list­ed as a bid­der after the offi­cial bid­ding list was revealed in April 2021, lead­ing some to spec­u­late that the firm was instead focused on the acqui­si­tion of the 45% stake.