Will MTN decide against another Ethiopian licence bid?

Will MTN decide against another Ethiopian licence bid?

It wasn’t too long ago that pan-African operator MTN seemed keen to have another try at the second Ethiopian telecoms licence it failed to win in May. That opportunity has now been offered, but MTN may no longer be as keen to get involved.

In late May MTN Chief Executive Ralph Mupita told shareholders that MTN would give some thought to the opportunity if the Ethiopian government chose to reissue the second licence for which MTN was deemed to have underbid.

And, as we reported earlier this week, Ethiopia has done just that. The government has formally announced that it will launch the process to award a second new mobile licence later this month. It will also include a permit to offer financial services, the lack of which may have undermined the appeal of the licence first time round.

But, according to a report on the Bloomberg news website, MTN is now unlikely to bid for the licence due to the investment risk. Bloomberg has been told that MTN may be put off by the civil war in the north of the country and tensions around a new giant dam on the Nile. Given that Ethiopia will require up to 8,000 towers to increase coverage, MTN may feel that a new bid is not worthwhile.

MTN has not yet made a final decision on whether to bid again, according to Bloomberg sources. However, the Ethiopian government does seem to be serious about going ahead.

The Ethiopian Communications Authority (ECA) has been quoted as saying “Preparation on the Request for Proposal (RFP) to re-bid the second licence is being finalised. The RFP will include integration of Mobile Financial Services in the scope of the licence.”

As yet we don’t know which – if any – operators or consortia have expressed interest in bidding.

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