Since 2021 Ethiopia’s government has wanted to sell 40% of its stake in state-owned Ethio-Telecom, then the sole operator in the East African nation. The government hopes increasing how much it is willing to let go of will convince buyers.
Last Opening up Ethiopia’s economy was the centrepiece of president Abiy Ahmed. But the outbreak of war between government forces and the Tigray People’s Liberation Front (TPLF) put paid to liberalisation efforts. In November 2022, however, the Ethiopian government and representatives of TPLF signed an agreement to stop the fighting.
With the war behind them, Abiy’s government is enthusiastically trying to repair its damaged relations with the West, fixing a badly limping economy and now, selling (part of) Ethio-Telecom.
The Ethiopian Ministry of Finance touted Ethio-Telecom’s near monopoly of Ethiopia’s telecommunications sector in public documents seen by TechCabal. “The Company’s robust infrastructure coupled with its strong financial performance will offer significant competitive advantage to any investor,” the statement read.
Ethiopia is looking for investors who can “add value to the Company by bringing in best practices in terms of operations, infrastructure management, and next-generation technological capabilities,” according to a Ministry of Finance tweet.
Telecom tenders in Ethiopia have been far from smooth affairs. In 2020 when the government invited telecom companies to bid for two licenses to compete against Ethio Telecom, it initially refused to allow the new telcos to outsource the building of new telecom towers and other infrastructure to dedicated tower management companies, which would have reduced operating costs for telcos. . Secondly, the new telcos were barred from operating mobile money services, a big part of Ethiopia’s allure.
The result was an underwhelming tender process that only saw two bids placed. One from South Africa’s MTN and the other from a consortium made up of Safaricom, Vodafone and Vodacom. In October last year, Safaricom commenced operations in Ethiopia.
Ethiopia hopes to raise $675 if it sells 45% of Ethio-Telecom.
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