Ethiopia awards telecom licence to Safaricom-led consortium

Ethiopia awards telecom licence to Safaricom-led consortium

Ethiopia’s telecommunications regulator awarded one operating license to a consortium led by Kenya’s Safaricom Vodafone, Japan’s Sumitomo Brook Taye, and UK finance agency CDC Group.

"The Council of Ministers has unanimously made a historic decision today allowing Ethiopian Communications Authority to grant a new nationwide telecom license to the Global Partnership for Ethiopia which offered the highest licensing fee and a very solid investment case," Prime Minister Abiy Ahmed said through his Twitter handle on Saturday.

East Africa’s mobile telecommunication giant Safaricom owns 56 percent, Japan’s Sumitomo 25 percent, CDC 10 percent, Vodacom 6 percent, and the rest is owned by the UK sovereign investment fund in the global partnership for Ethiopia consortium.

According to local media reports, which quoted Brook Taye, a senior adviser at the Ethiopian finance ministry, the Consortium paid $850 million for the licence, beating South Africa’s MTN, which had also bid for a licence with an offer of US$600 Million. The consortium paid US$850 million for the licence, he said. However, the amount bid by Safaricom and MTN Group is expected to be disclosed officially soon.

Safaricom’s chances of winning one of the licences increased exponentially after nine other firms dropped out of the bidding process. The firms that dropped out of the bidding process are Orange, Etisalat, Telkom SA, Snail Mobile, Axian, Liquid Telecom, Electromecha International Projects, and Kandu Global Communications.

The Safaricom consortia are expected to invest over $8billion (Sh864 billion) over the next decade, the PM hoped. "With over $8 billion total investment, this will be the single largest FDI into Ethiopia to date, said the Prime Minister noting that the process was competitive and above board.
Ethiopia, considered Africa’s second-most populous country, aims to open up its vast and unexplored telecoms market, creating millions of online jobs.

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