Orange wants to get involved in Ethio Telecom sell-off

Orange wants to get involved in Ethio Telecom sell-off

Ethiopia’s ongoing plans to sell off a stake in operator Ethio Telecom just got even more interesting with news that French giant Orange has formally declared an interest in buying a stake in the state-owned business.

Ethiopia’s ambassador to Paris, Henok Teferra Shawl, has been widely quoted as saying on Twitter that Orange had “formally submitted interest to participate in the partial privatisation of @ethiotelecom”.

How much of the operator Orange wants to buy is unclear. As Reuters points out, last month Ethiopia launched a tendering process for the proposed sell-off of a 40 percent stake in the state-owned carrier to private investors.

This is part of an ongoing government plan to open up the economy of the country. Telecommunications is undoubtedly one of the most attractive areas for investors given that this is the second most populous country in Africa after Nigeria – and that the authorities have been promising not just a partial privatisation of Ethio Telecom but the award of at least one new mobile operator license. However, things haven’t gone entirely to plan so far.

In May authorities handed out the first private operator licence to a consortium led by Kenya’s Safaricom, Vodafone, and Japan’s Sumitomo. A second licence was not awarded as the other bid, from an MTN-led group, was deemed too low. Some observers have put this low bid down to the ruling that, for now, no new entrant can offer mobile money services.

This doesn’t apply to Ethio Telecom of course. In fact the Ethiopian Herald reported nearly ten days ago claims from CEO Frehiwot Tamru that Ethio Telecom’s new mobile payment offering – called Telebirr – had signed up six million customers in only two months.

Meanwhile, Reuters says that Ethio Telecom reported an 18.4 percent rise in full-year revenue to end-June to 56.5 billion birr ($1.29 billion), all of which may make buying a stake in Ethio much more attractive than starting from scratch.