After Resuming Privatization, Gov’t Ups Ethio Telecom’s Stake Sale Size
Ethiopia’s ongoing telecoms reform has been nothing short of dramatic. Although a promising development for the massive East African market, opening up the sector to international players has had its ups and downs.
Last November, WeeTracker reported that the country’s authorities had resumed the sale of a stake in state-owned Ethio Telecom, after successfully selling its first-ever private telecoms license to a syndicate led by Safaricom—Kenya’s biggest telco and East Africa’s most valuable company.
In a new turnout of events, Ethiopia has increased the amount of Ethio Telecom shareholding available for purchase.
As of last year, it was 40 percent. Now, however, it has been disclosed by the Ministry of Finance that it has been revised to 45 percent, most likely to attract more attention from investors. Recall, the telco launched 5G services in May 2022. Also, last month, the business reported a 20 percent jump in half-year revenue to USD 633 M.
The government, led by Prime Minister Abiy Ahmed, hopes that partially denationalizing the telco, which boasts 44 million subscribers in a market of 120 million people, would make the service not only more competitive but also increasingly efficient.
For Abiy Ahmed, ending the government-controlled monopoly in the telecommunications sector of Africa’s second most populous country (after Nigeria) is essential to the economic reformation policy he adopted after taking up the leadership baton in 2018.
Safaricom won Ethiopia’s first telecoms license in May 2021 with USD 850 M, outbidding South Africa’s MTN. The operator then secured a mobile money license and kicked off commercial operations in October 2022.
Efforts to attract a third player on the turf were delayed by an almost two-year war in Northern Tigray, a civil outburst that claimed hundreds of thousands of lives and placed millions in distress.
However, after a ceasefire and peace treaty signing in the region, the government resumed the privatization process, noting that a second license is up for grabs. From here on out, it’s only a matter of time before Ethiopia welcomes a third telco.
Featured Image: Money Control