A consortium, led by Vodacom affiliate Safaricom, has won a licence to operate a mobile network in Ethiopia, the first such award to a private group as the country looks to open up its telecoms industry to competition.
The consortium, which includes Vodafone, Vodacom, Safaricom, Sumitomo Corporation, and the CDC Group, won the bid offering $850 million, two million dollars more than the second-highest bidder, the office of the prime minister said in a statement.
In 2020 Ethiopia started a bidding process for two new licenses to compete with Ethio Telecom, the state-owned and only network operator with about 45-million subscribers. Mobile network operators including MTN and Econet Global have been eyeing an entry into Ethiopia to beef up their operations on the continent, given the number of customers that the country could add to their bases.
Econet Global Ltd, controlled by Zimbabwean billionaire Strive Masiyiwa, was looking forward to acquiring a telecommunications license in Ethiopia, which was opened up to foreign investment for the first time.
The shake-up of the potentially lucrative sector — currently dominated by state-owned Ethio Telecom — is a cornerstone of Prime Minister Abiy Ahmed’s economic reform agenda.
Abiy, who is running for a new term in hotly anticipated national elections next month, hailed the news on Twitter Saturday, saying the consortium’s bid “offered the highest licensing fee and a very solid investment case.”
He said the consortium would bring the largest infusion of foreign direct investment in Ethiopia to date, and that “our desire to take Ethiopia fully digital is on track.”
Abiy’s government planned to award two new telecoms licences, but in late April it announced it had received only two bids after some firms that initially expressed interest — including France’s Orange and the UAE’s Etisalat — opted not to submit.
“With over USD 8 billion total investment, this will be the single largest FDI [foreign direct investment] into Ethiopia to date. Our desire to take Ethiopia fully digital is on track. I would like to thank all that have taken part in this and for pulling off a very transparent and effective process!” Abiy added.