Ethiopia Moves to Open Phone Industry to Investors


(Bloomberg) --

Ethiopia plans to sell 40% of the state-controlled telecommunications monopoly as the government moves to open up the industry to international operators for the first time.

Details on the partial privatization of Ethio Telecom will be announced “soon,” Brook Taye, an adviser to the state minister of finance, Eyob Tekalign, said on Thursday. Ethio Telecom Chief Executive Officer Frehiwot Tamiru didn’t respond to calls and a text message requesting comment.

Ethiopia is also pushing ahead with plans to sell two new telecommunications licenses to compete with the state-controlled incumbent almost two years after Prime Minister Abiy Ahmed announced plans to part-privatize the market. The government has opened a monthlong window for potential buyers to submit expressions of interest, with the International Finance Corp. acting as adviser.

Africa’s second-most populous country is one of the final frontiers for telecom investors, and carriers such as Orange SA, MTN Group Ltd. and Vodacom Group Ltd. are among those considering the opportunity. It will be a “competitive bidding process,” according to a statement from the Ethiopian Communication Authority.

“Competition brings better service and prices, and we have been thirsty for that within the telecom sector in Ethiopia,” said Addis Alemayehu, chief executive officer of Addis Ababa-based consultancy 251 Communications. “This will also unleash the tech sector in the country, as well as increase innovation and job creation.”

Last month, the ECA published the first three of a dozen draft directives to guide how the sector should operate with private carriers. Ethiopia’s initial plans to issue licenses by March were disrupted by the decision to hold elections on Aug. 29, which have since been postponed indefinitely due to the coronavirus outbreak.

Consultancy firm KPMG LLP has completed a valuation of Ethio Telecom, which is under review by the board.

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