Ethiopia May Abandon Telco Transaction If Offers Are Underwhelming

safaricom ethiopia

Ethiopia has been on a path to partly privatize its telecoms industry.

Over the last couple of months, the country has received applications in the name of bids from companies that look forward to owning part of the lucrative deal. 

Safaricom, MTN and Orange SA are some of the few companies that have since applied to own serve the carrier space.

However, it has since emerged that Ethiopia may as well stop the transaction altogether if telcos do not reach a set target.

According to Bloomberg, three independent firms have arrived at a figure for two new licenses that would competitive alongside Ethio.

The figures, which have been submitted to the Ethiopia government, are a ballpark that the govt is looking forward to raising from the sale.

The numbers have not been named, but Ethiopia says if bidders meet them, then the sale would proceed. Otherwise, the government will not go ahead with the transaction.

The privatization exercise is part of the Ethiopia government’s plan to shake up things in telecoms through service improvement and job creation.

The nation has more than 100 million people. It has attracted attention from global mobile operators that think the space has not been tapped, and is only served by state monopoly Ethios Telecom.

The transaction was supposed to end in early 2020, but the advent of the pandemic and regulatory hurdles extended the sale.

The complexities have also been considering the issuance of mobile money licenses, of which Safaricom is best known for after years of M-PESA success.

Safaricom has since secured a loan from US lenders in anticipation of an Ethiopia entry.

Safaricom had claimed that it is in the final stages of securing the space. However, Ethiopia has since dismissed the claim.

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Kenn Abuya is a friend of technology, with bias in enterprise and mobile tech. Share your thoughts, tips and hate mail at [email protected]