Consortium comprised of Safaricom wins telecom license in Ethiopia

Ethiopia has awarded a telecom license to the Global Partnership for Ethiopia, a consortium composed of Safaricom, Vodafone, Vodacom, CDC Group, and Sumitomo Corporation. The award of the license, which was highly anticipated, gives a full telecom operator license to a private business for the first time in over a century in the Horn of Africa state.

The consortium offered a $850 million bid and the Ethiopian Communications Authority has already confirmed that it has won the bid, which was opened three weeks ago.

The other bidder, the consortium comprising of MTN and the Chinese Silk Road Fund, did not manage to win a license as its $600 million bid offer was declared inadequate by the Ethiopian authorities.

The award of the license to Vodafone consortium marks the culmination of bids submitted to the Ethiopian regulatory authorities in mid last year.

During the bidding process, Kenya’s telco Safaricom, its South African shareholder Vodacom and UK’s Vodafone, partnered and submitted a joint bid for the two new full-service telecommunication licenses in Ethiopia.

Working under the umbrella of Global Partnership for Ethiopia, the three telecom operators’ consortium was among the 12 interested parties that expressed interest to be awarded one of the possible licences by the Ethiopian government.

On May 21, 2020, Ethiopia’s Ministry of Finance and the Ethiopian Communications Authority (ECA) launched Expression of Interest (EoI) process for the issuance of two full-service telecom.

Ethiopia’s telecom’s industry is still a monopoly only served by the government controlled Ethio Telecom.

After the launch of the EoI process, the prospective bidders were given one month to express their interest by submitting the requested information. In the EoI, the prospective bidders were requested to provide information on their organizational structure, global operating footprint, details of countries of operation, number of mobile phone subscribers, and other relevant information that can help the authorities assess the strength of potential bidders and determine the adequate level of qualification criteria to select the type of operators that would fit best into the Ethiopian market.

Accordingly, on the closing date of June 22, 2020, the ECA received 12 submissions, out of which 9 are telecom operators and 2 are non-telecom operators and 1 incomplete submission.

“The ECA would like to acknowledge receipt of complete information and expression of interest from the Global Partnership for Ethiopia (a consortium of telecom operators made of Vodafone, Vodacom, and Safaricom), Etisalat, Axian, MTN, Orange, Saudi Telecom Company, Telkom South Africa, Liquid Telecom, Snail Mobile, and the two non-telecom operators, Kandu Global Telecommunications and Electromecha International Projects,” the ECA said in a statement.

“The Ministry of Finance and ECA would like to thank all those potential bidders who have responded to the request and expressed their interest. As the ECA prepares for the next stage, it will keep the participants informed and engaged as the process moves forward. ECA remains fully committed to fulfill Ethiopia’s telecommunications sector reform and enhance its digital transformation.”

In mid 2019, the Ethiopia government announced that it had plans to issue two telecoms licences to multinational telcos and also offer a minority stake in Ethio Telecom, the monopoly operator.

Ethiopia’s telecoms industry is considered the big prize in a push to liberalise the country’s economy launched by PM Abiy Ahmed because of its huge protected market serving a population of around 100 million.

The country is also considered one of the final frontiers globally for multinational telcos which have been eagerly awaiting the government’s announcement on the market structure since parliament passed a bill last month outlining the scope of a regulator for the sector.

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