Safaricom employee exit adds to Ethiopian telecoms uncertainty

Safaricom employee exit adds to Ethiopian telecoms uncertainty

Safaricom, whose license-winning consortium in Ethiopia was to begin operations next year, has reportedly evacuated its employees from Ethiopia because of the ongoing armed conflict.

The Business Daily Africa website reports that the employees left the country on Wednesday and Friday.

Safaricom had seconded staff to run Ethiopian operations for products and network development in readiness to begin operations next year. The idea was to gradually reduce Kenyan expertise and build the local workforce as the business grew.

The Safaricom consortium, which also includes British development finance agency CDC Group and Japan’s Sumitomo Corporation, won a licence to offer mobile services in Ethiopia with a bid of $850 million. The licence has been awarded for an initial period of 15 years. Until recently, only state monopoly Ethio Telecom offered mobile services in the country.

The government is also looking to sell a minority stake in Ethio Telecom and a second new licence. Both new entrants will be permitted to offer mobile money services, a sector in which Ethio Telecom has made some major inroads of late.

As we recently announced, the Ethiopian Communications Authority (ECA), Ethiopia's telecommunications regulator, has invited a request for proposals for the second licence, to be delivered by 20 December. This was the second time; the last bid was deemed too low.

However, the situation in the country is now undoubtedly serious. A number of nations have already advised their citizens to leave Ethiopia. Tigrayan rebel forces and their allies told Reuters last week that they were 325 kilometres from the capital. Prime Minister Abiy Ahmed’s government has ignored international appeals for a ceasefire.

The questions for the ECA now are whether the new licence award can go ahead on time and, indeed, whether Safaricom will be able to begin trading as planned.

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