Sunday, 05 July 2020

Ethio Telecom selling 45% stake as Ethiopia’s telecoms market opens up

by Harry Baldock, Total Telecom
Wednesday 27 May 20

The Ministry of Finance says 40% equity will be made available to foreign investment, while 5% will be made available to the public

Ethiopia’s telecoms market has long been notable for being one of the last remaining telecoms monopolies in the world, with connectivity provided exclusively by government owned Ethio Telecom.   In the last year, the government has decided that now is the time to liberalise the market…

Ethiopia’s telecoms market has long been notable for being one of the last remaining telecoms monopolies in the world, with connectivity provided exclusively by government owned Ethio Telecom.
 
In the last year, the government has decided that now is the time to liberalise the market. Plans were initially drawn up to allocate a pair of operating licences to foreign telcos in March, but the process has been struck with numerous delays. 
 
Now, however, the Ministry of Finance has announced that the other key facet of the plan – the partial sale of Ethio Telecom – will continue to go ahead, unhindered by the uncertainty of the coronavirus pandemic.
 
The government is looking to sell a 40% stake in the company to foreign investors, while a further 5% will be made available for public purchase.  The Ethiopian government will retain a 55% stake in the telco.
 
"The main aim of involving the public as the owner is to avoid the monopoly of the government and the private owner," explained Prime Minister Abiy Ahmed.
 
Potential investors have yet to be announced and will reportedly be kept anonymous until the auction process begins, but they are likely to be numerous. Ethiopia has a huge potential mobile market, which currently serves around 110 million people with a penetration rate of 45.4%. 
 
Legal due diligence and the accompanying logistics remain to be completed before a sale can go head, but partner selection and negotiation is nonetheless expected to begin in the short-term. 
 
Meanwhile, the process of granting the two additional licences is slowly beginning to get moving once again, with the government regulator calling for bids by the 22nd of June.
 
 
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