There has been much fanfare around Ethiopia’s plan to liberalize its telecoms market, as international players eye the diminishing number of markets that have not already opened up to new entrants. However, the country’s recent suffering from renewed civil conflict and the pandemic have dampened enthusiasm, and only two bidders actually emerged for the two new licences on offer, despite two extensions to the original deadline of December 10 2020.
Those bidding to compete with incumbent Ethio Telecom highlight the role strategically-placed Ethiopia tends to play in wider geopolitics. One is South Africa’s MTN, backed by China’s Silk Road Fund; the other is a consortium led by Vodafone, but backed by US and UK financing. The funds come from a $500m loan from the US government-backed International Development Finance Corporation, and from the UK-backed Commonwealth Development Corporation. Technical support will come from another consortium member, Sumitomo of Japan, which has been working in Myanmar with KDDI and state-owned operator MPT.
The Ministry of Finance will now conduct a technical and financial evaluation of both bids.
The Vodafone group, called Global Partnership for Ethiopia, includes two of the UK giant’s African affiliates, Vodacom and Safaricom, in which it holds substantial stakes. Shameel Joosub, CEO of Vodacom Group, said in a statement: “We are submitting a strong tender as the Global Partnership for Ethiopia consortium led by Safaricom … The country’s authorities have repeatedly committed to create and maintain a level playing field for all, giving us confidence that the next round of regulations will be tackled as soon as possible. Our Global Partnership for Ethiopia has a unique mix of experience and know how to help transform Ethiopia into a modern digital economy and to positively impact the lives of Ethiopians.”
Balcha Reba, director general of the Ethiopian Communications Authority (ECA), said:
“We are delighted to have had interest from established telecoms operators around the world, including … Africa’s two telecoms giants, MTN, the largest telecoms operator on the continent, and the Vodafone/Vodacom consortium, including Kenya’s largest telecoms provider, Safaricom.”
MTN said in a statement: “MTN Group confirms that it is participating with equity partners in a bid for a telecoms licence in Ethiopia, Africa’s second most-populous country which represents the last and largest telco liberalisation opportunity in the world. Our participation is aligned with our strategy, Ambition 2025, focusing on capturing growth from digital acceleration across the continent. It has been made in partnership with Silk Road Fund from China. Other partners will be disclosed on a successful bid outcome.”
Another opportunity to enter the Ethiopian market may come from a government proposal also to sell shares in Ethio Teleco. That might attract Orange, a major player in Africa, which had expressed interest in bidding for a licence but may prefer to buy a share in the incumbent. Orange in the past had a management contract with Ethio Telecom.