Ethio Telecom sale process begins

Ethio Telecom sale process begins

The process that will lead to the sale of just under half of Ethiopia’s state-owned operator Ethio Telecom is apparently under way.

According to Reuters news agency, Ethiopia this week launched a tendering process for the proposed sell-off of a 40 percent stake in Ethio Telecom to private investors.

Of course it’s early days yet. For the moment, interested investors are invited to submit expressions of interest. This, according to the government, is the first of a series of stages that will lead to the picking of a successful bidder. It also appears that the 40 percent of Ethio Telecom is to be sold as a single stake to a single investor.

Of course, Ethiopia is also aiming to license private operators to compete with Ethio Telecom, though this process has not been without controversy. The first private operator licence went to a consortium led by Safaricom, Vodafone, and Japan's Sumitomo, for which the consortium was said to have paid $850 million.

As we reported earlier today, Ethiopian prime minister Abiy Ahmed Ali presented the licence at a ceremony in Addis Ababa. A second licence is still up for grabs after an MTN-led consortium was deemed to have made too low a bid.

However, the chance to offer mobile money services may not be available for any new entrant for some while. This puts a newly licensed private operator at a competitive disadvantage to Ethio Telecom, which recently launched its own mobile money service called telebirr. For that reason, Ethio Telecom may be considered a more attractive investment than a new licence.

This sale of at least some of Ethio Telecom is described as part of the government's broader plan to open up the country's economy.

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