The Ethiopian government is considering a significant structural reform on the country’s telecom monopoly, Ethio Telecom, that may lead to the state-owned firm split into two units – with one unit in charge of service provision while the other deals with infrastructure. The split may also result in the privatisation of some parts of the telco.
According to media reports, Ethio Telecom and the Ministry of Communication & Information Technology (MCIT) are in the process of hiring a consultant to undertake a four-month study.
(TOP: Ethio Telecom head offices in Addis Ababa, Ethiopia).
Among other things, the study is expected to complement the government’s plan to expand and introduce the firm’s coverage and services outside Ethiopian borders. Already, Ethio Telecom has already been connected via fibre optics with its neighbours and has coverage in neighbouring countries such as South Sudan and Djibouti.
“The telecom has finalised its preparations to carry out the study and is only a step away to pick the right company,” Andualem Admase, Ethio Telecom’s CEO told Addis Fortune, adding that the selection of the consulting firm will be announced by the end of the current Ethiopian fiscal year.
In early 2000, the Ethiopian government signed an agreement with France Telecom to takeover the firm’s Enterprise management in a deal worth an estimated US $30 million dollars. The management contract ran from 2010 to 2013 with the government stating that it outsourced the function to France Telecom as Ethio Telecom was not able to meet the demands of the fast-growing country
“For such a dynamic sector, eight years is a long time,” said Andualem, who is also overseeing another expansion project that will see the state enterprise partnering with private players, told Addis Fortune.
Recently, 11 local companies passed a preliminary technical evaluation for the right to partner with the telco to open 94 retail shops in 89 towns across the country. The move is expected to increase the number of the firm’s service centres from 214, all which have recently been equipped with electronic payment systems. The partnership will move the operation of the telecom’s existing and new service centres to the bidders using the brand.
With over 60 million subscribers, Ethio Telecom currently ranks as the largest mobile network operator in Africa followed by MTN Nigeria. The state monopoly was established in 1952.