Wednesday, 08 April 2020

Safaricom looking for partners to break into Ethiopian market

by Harry Baldock, Total Telecom
Wednesday 19 February 20

Only two licences are on offer in Ethiopia, with entry costs expected to be around $1 billion

Ethiopia’s telecoms monopoly is finally about to come to an end, with two spectrum licences expected to be allocated this April.   There has been much speculation over who will bid for these licences…

Ethiopia’s telecoms monopoly is finally about to come to an end, with two spectrum licences expected to be allocated this April.
 
There has been much speculation over who will bid for these licences, with Orange and Safaricom both vocal in expressing their interest. 
 
There was also speculation that MNT would be placing a bid.
 
However, the cost to break up the current monopoly will not be cheap; the price tag to acquire one of these licences is estimated to exceed $1 billion, which will see most players think twice about investing.
 
Indeed, the price may be too steep for Safaricom to go it alone, and the company has now disclosed that they in discussions with undisclosed investors to form a consortium in order to bid effectively.
 
Last year, Safaricom was in talks of a joint bid with Vodacom, but it seems a full consortium could be on the cards for this important bid.
 
“We have not made any decisions yet as the constitution of the consortium has not been finalised,” said acting Safaricom CEO Michael Joseph.
 
Ethio Telecom, the sole operator currently in Ethiopia, is also moving to offer a minority stake to a strategic investor – an offer which could also be appealing to Safaricom.
 
 
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