Ethiopia to Partly Sell Telecoms Company, Award Licenses in 2020


(Bloomberg) -- Ethiopia plans to sell a minority stake in the state-owned phone monopoly and award telecommunications licenses to two new operators in the first quarter of next year, the finance ministry said.

The announcement comes as Paris-based Orange SA and the biggest wireless carriers operating on the continent, including MTN Group Ltd. and Vodacom Group Ltd., have expressed interest in the market of Africa’s second-most populous nation with 100 million people. Orange Deputy Chief Executive Officer Ramon Fernandez said the French carrier is considering a bid for a stake in the government’s Ethio Telecom, but is also open to compete for a license and become its rival.

Ethiopian Prime Minister Abiy Ahmed is opening up the telecommunications sector as part of his agenda to liberalize one of the world’s fastest-growing economies and attract more foreign capital. Abiy targets to double the number of jobs created to 3 million in 2019-20 from previously, and said that’s the dividend he wants to see out of his reform agenda.

The privatization will be done through a competitive bidding process, the ministry said Friday in a statement on its website.

Increased competition in telecommunications will expand services to “under-served areas in the country, which is in line with the government’s goals of universal coverage,” the ministry said. “Partial privatization of Ethio Telecom and private investment in the expanded telecommunications market will also contribute to attracting foreign direct investment,” it said.

Firstly, the government will structure Ethio Telecom into two parts. The infrastructure division will manage the international gateway and fiber optic networks, while cellular and retail operations will fall under the services unit. Ethiopia recently enacted a law that creates a new telecommunications regulator to support the reforms.

Ethiopia also plans to sell at least five sugar factories in 6 to 12 months, according to the ministry.

©2019 Bloomberg L.P.

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