Saturday, 29 February 2020

Will MTN remain quiet on Ethiopian licencing bid?

by Harry Baldock, Total Telecom
Tuesday 28 January 20

With Ethiopia’s telecoms monopoly set to break later this year, will MTN grab one of two available licences?

There has been much speculation surrounding who will bid for the two spectrum licences being made available by the newly formed Ethiopian Communications Authority (ECA) in March this year. Orange and Safaricom have been vocal about their interest in acquiring access to the Ethiopian market…

There has been much speculation surrounding who will bid for the two spectrum licences being made available by the newly formed Ethiopian Communications Authority (ECA) in March this year. Orange and Safaricom have been vocal about their interest in acquiring access to the Ethiopian market, but South African MTN could well be considering a bid too.

The licences have been estimated to cost around $1 billion, a price tag which could see many telcos priced out of a potential seat the table.

However, MTN has recently been undergoing an asset disposal plan, reported to have raised around $958 million so far – funds that could be used for a shot at an Ethiopian licence.

Previously, MTN has forgone Ethiopia in order to focus on Angola, another market offering huge potential for growth. However, the company’s Angolan ambitions were not to be, with the initial licencing process ultimately cancelled and postponed to a future date.

With Angola and Ethiopia both offering excellent potential, it seems MTN has a big decision to make.

For Ethiopia’s sole telco, Ethio Telecom, the liberalisation of the country’s telecoms market will be a bumpy ride, as it is forced to make room for new players in the market.

In a press conference two weeks ago, Ethio Telecom CEO Frehiwot Tamiru noted the company’s concerns about the ECA’s proposed regulation framework.

“We have concerns on spectrum, frequency allocation and roaming service. Some of the articles will create a difficult situation for Ethio Telecom to expand and provide basic telecom services. We need to tackle these challenges,” Frehiwot said.

Having enjoyed a state monopoly for 126 years, the incumbent operator will surely be at loggerheads with the newly formed ECA for much of the immediate future.

 

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