London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – June 27, 2021

Ethiopia’s smartphone shipments increased 9.8% in Q1 2021, according to the latest Market Monitor report from Counterpoint Research. This growth was driven by an increase in the mobile phone network penetration and increase in the number of first-time users due to the pandemic-triggered surge in work and study from home.

TECNO retained its #1 spot in the market in Q1 2021 registering a growth of 27% YoY. Samsung also retained its #2 spot registering a growth of 31% YoY driven by affordable A-series smartphones like the Galaxy A02 and Galaxy A12. Samsung’s shipments during the quarter were the highest ever in the last three years. The share of the top four OEMs (TECNO, Samsung, itel and Infinix) stood at 89%, the highest ever for any quarter.

The #3 spot went to itel, whose shipments grew 53% YoY. The OEM also saw a significant market share gain by climbing to 19% from 14% in Q1 2020 on a strong performance of its low-end models. Transsion Group accounted for more than 61% of the Ethiopian smartphone market shipments, compared to 54% in Q1 2020. The Others category saw a decrease in share in Q1 2021, mainly due to the impact of global chipset shortages.

Exhibit 1: Ethiopia Smartphone Shipment Market Share, Q1 2021

Source: Counterpoint Research Market Monitor

Rising political and economic uncertainty caused by COVID-19 continued to skew the consumer buying pattern toward more affordable but feature-rich smartphones. 4G smartphone shipments grew 44% YoY, whereas 2G and 3G phones continued to decline at 18% YoY and 35% YoY respectively. Feature phones continued to dominate the handset market with a 62% share. However, this was their lowest ever share in Ethiopia.

Commenting on the market dynamics, Research Analyst Aman Chaudhary said- “Africa’s second most populous nation with over 110 million people, Ethiopia is among the countries having one of the lowest mobile penetration in the world. This is due to its large rural population and strong government control on the telecom market. The monopolistic control has discouraged innovation, restricted network expansion and limited the scope of telecommunication services”.

Chaudhary added, “However, in June 2019, the government decided to open the market to private competition and to the much-needed foreign investment in the sector. The process to partially privatize government-owned Ethio Telecom advanced in June 2021 with the launch of the tender process to offload a 40% stake in the company. Ethiopia has also decided to allocate two licences to private operators to offer competition to Ethio Telecom. In May 2021, the government handed out the first private operator license to a consortium led by the UK’s Vodafone, Kenya’s Safaricom and Japan’s Sumitomo. The consortium is expected to invest over $8 billion over 10 years, making it the single largest FDI in Ethiopia till date. For the second license, South Africa’s MTN is expected to bid again if mobile financial services are included, apart from data and digital services.

The government has also announced the rollout of a long overdue mobile phone-based financial service, called Tele Birr. Already available to Ethio Telecom users, the service covers remittance, bill payment and online banking. Mobile-based financial services are among the top use cases for both smartphone and feature phone consumers. This should prompt global players such as Xiaomi, OPPO and vivo to enter the market with their lower and mid-segment offerings. Their understanding of the offline channels in the MEA market, brand recognition in this region offers a significant opportunity that has the potential of enabling these OEMs to gain significant market share in Ethiopia.

Ethiopia is among the world’s fastest-growing economies. It has a large young population that is poised to benefit from the telecom sector liberalisation and the entrance of foreign private players who will grow the network and offer competitive tariffs. This in turn, will exponentially grow the demand and subsequent penetration of the smartphone market.

Background:

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Author:

Aman Chaudhary

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