Tuesday, May 18, 2021

Ethiopia receives two bids for two telecoms operating licences

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Ethiopia’s finance ministry said on Monday it had received two bids, from South Africa’s MTN (MTNJ.J) and a consortium including Kenya’s Safaricom (SCOM.NR), for new telecoms operating licences.

The announcement is the latest step in the Horn of Africa nation’s efforts to liberalise its economy. The country of 110 million people has one of the world’s last closed telecoms markets.

Vodafone (VOD.L), Vodacom (VODJ.J), the United Kingdom’s CDC Group and Japan’s Sumitomo Corporation are also part of the consortium, the finance ministry said in a tweet announcing the two bids it had received.

Brook Taye, a senior advisor at the finance ministry, told Reuters that it should not take more than a week for the winners of the licences to be announced.

We will select the winners after technical and financial evaluation is completed,” Balcha Reba, director general of the Ethiopian Communications Authority, said at a press conference on Monday.

The licences will pave the way to open up Ethiopia’s telecoms industry, which is considered the big prize in the country’s push to liberalise the economy.

The liberalisation will also involve the sale of a 45% stake in Ethio Telecom, which has said it also plans to launch mobile money transfer services.

“It seems companies like Orange and Etisalat are more interested in buying a stake in Ethio Telecoms,” Brook said, referring to the French and the United Arab Emirates mobile operators.

Kenya’s Safaricom said in a statement that “for structuring purposes, the respective consortium members may invest through special purpose investment vehicles”.

The company estimated in 2019 that it would have to pay about $1 billion for a new licence.

Vodacom Group CEO Shameel Joosub said the consortium had submitted a “strong tender”.

MTN had no immediate comment.

The bid winners will secure full operating licences, but they will not be allowed to operate mobile phone-based financial services, government officials said last year.

They will also be required to set up their own network infrastructure, such as cellphone towers, they said.

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