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.