Ethiopia to break Up Ethio-telecom’s Mobile Payments Monopoly

In a move that could revolutionize the way people in Ethiopia do business, the government has granted a mobile money license to Safaricom. The company’s M-Pesa service is already used by millions of people in other African countries, and its arrival in Ethiopia is expected to have a major impact on the economy.

M-Pesa allows people to send and receive money, make payments, and access other financial services using their mobile phones. This is a major step forward for Ethiopia, where many people do not have access to traditional banking services. M-Pesa is expected to make it easier for people to save money, start businesses, and participate in the formal economy.

The government’s decision to open up the mobile money market is a major blow to Ethio-telecom, which has had a monopoly on the telecommunications market in Ethiopia since 1998. Ethio-telecom has been criticized for its high prices and poor service. The arrival of M-Pesa is expected to force Ethio-telecom to lower its prices and improve its service in order to compete.

This is a win for consumers in the long run. More competition will lead to lower prices and better service. This will make it easier for people to save money, start businesses, and participate in the formal economy.

In addition to benefiting consumers, the government’s decision to open up the mobile money market could also help to alleviate inequality and poverty. M-Pesa has been credited with helping to reduce poverty and financial exclusion in other African countries. By making it easier for people to access financial services, M-Pesa can help people to save money, start businesses, and improve their lives.

The government’s decision to open up the mobile money market is a positive step for Ethiopia. It is a sign of the government’s commitment to economic reform and it is a win for consumers. M-Pesa has the potential to revolutionize the way people in Ethiopia do business and it could help to alleviate inequality and poverty.

Think Like An Economist!

Q1. Define market power.

Q2. Explain one reason why a monopoly has market power.

Q3. Analyse the impact of increased competition on the market for mobile payments.  

Q4. Discuss in the context of the article whether monopoly power is always bad for consumers.

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TheCuriousEconomist

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