Safaricom-backed consortium wins telco licence in Ethiopia – KBC

Safaricom Plc and five of its partners under the Global Partnership for Ethiopia have won the bid to roll out mobile telecommunication services in Ethiopia ending the decade-long monopoly held by Ethio Telecom.

The Global Partnership for Ethiopia which includes Safaricom from Kenya, UK’s Vodafone Group, Vodacom Group (South Africa), CDC Group (UK) and Sumitomo Corporation (Japan) and Development Finance Corporation (DFC) beat South Africa’s MTN Group which had financial backing of Chinese Investment fund, Silk Road Fund for the much-awaited license following liberalization of Ethiopia’s telecommunication sector.

Ethiopia Prime Minister Abiy Ahmed welcomed the announcement terming the Global Partnership for Ethiopia fee paid for the license as a very solid investment case and the largest single Foreign Direct Investment (FDI) in the country.

“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,” said PM Ahmed via his twitter handle @AbiyAhmedAli.

According to a joint statement from the Ethiopia’s Ministry of Finance and the Ethiopian Communications Authority the new investment reflects a major external investment into Ethiopia and its telecommunication market and an end to a decade-long state monopoly.

“Today marks a decisive day for our economic reform path in Ethiopia. With the liberalization of the telecom market through a fair and transparent process, the government enables every Ethiopian to access quality services at an affordable price,” said Finance Minister Ahmed Shide.

Ethiopia begun plans to license a second telecommunications service provider in October last year, with Ethiopian Communications Authority (ECA) receiving proposals from GPE and MTN Group.

Reuters reports that the Global Partnership for Ethiopia paid $850 million (Kshs. 92 billion) for the communications license outbidding MTN Group in the process.

ECA now expects the consortium to invest up to $8 billion dollars in Ethiopia’s telecommunication sector over the next 10 years.

“This decision ushers in a new era of telecom service development in our country which will benefit million of Ethiopians to have access to quality and reliable communications services. Global Partnerships for Ethiopia is a consortium of reputable telecom companies providing service to over 750 million customers all over the world and committed to create new jobs, support the economy through introduction of new and efficient services,” said Balcha Rebe, ECA Director General.

Safaricom is Kenya’s largest mobile service provider with 31.45 million active monthly users boasting of Kshs. 250.4 billion ($2.3 billion) in services revenue as at the end of 31^st March 2021.

Ethio Telecom which has been in operation since 2010 has 45 million mobile subscribers in a 112 million market offering voice, mobile money and fixed line services.