Partial privatisation of Ethio Telecom gets under way

Partial privatisation of Ethio Telecom gets under way

As expected, the Ethiopian government has formally announced its proposal for the partial privatisation of state-owned operator Ethio Telecom.

The Ethiopian News Agency has reported that the government has released a request for proposal (RFP) for the partial privatization, with the aim of inviting proposals from interested parties who can, as the announcement puts it, “add value to the company by bringing in best practices in terms of operations, infrastructure management and next generation technological capabilities”.

This isn’t the only privatisation under way or planned in Ethiopia. The Government of Ethiopia has laid out the framework for the privatisation of a number of public enterprises under the Public Enterprises Privatisation Proclamation No. 1206/2020.

The objective of this strategy is to broaden the role of the private sector in the Ethiopian economy, improve the efficiency of public enterprises, enhance their competitiveness, increase their access to capital, and enhance the quality and accessibility of their services.

As for the telecommunications business, the announcement makes it clear that a fast-growing economy and a young population, along with low teledensity, are among the reasons that the country hopes to attract private investment to make the most of what is described as “the huge untapped potential in Ethiopia’s telecommunications sector”.

The announcement suggest that Ethio Telecom’s “robust infrastructure coupled with its strong financial performance will offer significant competitive advantage to any investor”. If this is indeed the case, the response to the RFP will be interesting.

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