Safaricom Re-energizes Ethiopia Entry with Bid for Telco License

Safaricom CEO COO and Chairman
Safaricom PLC chairman Nicholas Ng’ang’a, Safaricom PLC CEO Peter Ndegwa and the Outgoing Safaricom PLC CFO Sateesh Kamath

Back in April, Ethiopia opened the floor for new players who wanted to be part of its telco space, particularly in mobile money. When we talk about mobile money and its associated products and services, the next thing that comes to mind is M-PESA. M-PESA, because the product is hugely successful in Kenya and has put the country in the world map, alongside other players that have failed to replicate its offerings.

The April announcement was in line with Ethiopia’s plan to liberalize its telecoms space by giving out two mobile money licenses. At that time, it was also reported that the country was in the process of selling its stake in Ethios Telecoms. Safaricom had reportedly been engaged in participating in sale toward forming a new company.

These developments paint a big picture, that is, Safaricom wants so much to start operations in Ethiopia. However, it is not as straightforward as the majority of us had expected because there are way too many moving parts in the whole operation. For instance, the April announcement strictly limited the launch of mobile money products and services to local organizations, effectively kicking out any prospects of Safaricom’s M-PESA launching there.

Toward the end of April during the announcement of Safaricom’s 2019/2020 FY financials, former interim CEO Michael Joseph said the company was still pursuing leads to enter Ethiopia. “Investment into Ethiopia is in the pipeline pending the decision by the Government of Ethiopia,” said Michael Joseph.

Now on May 21, 2020, Ethiopia’s Ministry of Finance and Communications Authority started an expression of interest process for the issuance of two new full-service telecoms licenses.

The launch of the bid was marked by a one-month period for bidders to express their interests by submitting the requested information, including their organizational structure, global operating footprint, details of countries of operation, number of mobile phone subscribers, and other relevant information that is to help the state assess the strengths of potential bidders, and ascertain level of qualification criteria to pick the type of operators that would best fit in the potentially lucrative Ethiopian market.

The bidding process was concluded on June 22 following 12 submissions from interested parties. Nine of the applicants are telecom companies, 2 are non-telecom operators and 1 did not do a complete submission.

These are the companies that submitted bids: Global Partnership for Ethiopia (Vodafone, Vodacom and Safaricom), Etisalat, Axian, MTN, Orange, Saudi Telecom Company, Telkom SA, Liquid Telecom, Snail Mobile, and the two non-telecom operators, Kandu Global Telecommunications and Electromecha International Projects.

The details of the next phase have not been announced for the moment, so, fingers crossed.