Ethiopia bars infrastructure vendors after Ethio Telecom intervention

Ethiopia bars infrastructure vendors after Ethio Telecom intervention

Not long ago Ethiopia invited foreign firms to buy stakes in Ethio Telecom to end its monopoly. Now according to The East African, a regional publication, the Ethiopian government has suspended the entry of foreign telecom infrastructure companies into the country.

It appears that several infrastructure companies, including big names such as Helios Towers, were interested in entering Ethiopia to build new telecom infrastructure and to lease or rent it for companies entering the market.

Ethio Telecom has responded angrily to this with a letter of complaint to the government, arguing that it has spent billions of dollars on telecom infrastructure across the country in recent years and wants the opportunity to rent it to the newly entering companies.

By ‘newly entering companies’, Ethio Telecom is presumably referring to the fact that at the end of June, the national regulator announced that twelve companies had registered their interest in gaining a licence, including Safaricom, Vodacom, and Orange.

The upshot of this is that, for now, the government has decided not to allow foreign telecom infrastructure companies to operate in the country, leaving a de facto monopoly in place, at least for infrastructure, unless incoming telecom operators build their own.

There are, apparently, other issues relating to the privatisation process that are worrying Ethio Telecom, which has also written a letter to the Ethiopian Communication Authority about them, though it is not yet clear what these are.

All of which leaves a number of questions unanswered. When will the two operator licences promised last year become available? Will a promised 40 percent stake in Ethio Telecom itself be sold? And exactly when will one of the last remaining telecoms monopolies in the world be open for business?