Ethiopia restarts sale of Ethio Telecom stake, new telecoms licence

PUBLISHED: Wed, 16 Nov 2022 13:48:02 GMT
George Obulutsa
Reuters
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Key Points
  • Telecoms the big prize in stalled privatisation drive
  • Process revives after ceasefire deal in Tigray region
Ethio Telecom employees serve a customer inside their call centre in the Bole neighborhood branch in Addis Ababa, Ethiopia July 29, 2022. REUTERS/Tiksa Negeri

NAIROBI, Nov 16 (Reuters) – Ethiopia has reactivated the process of selling a 40% stake in state-owned Ethio Telecom and a separate plan to issue a second full telecoms licence, the finance ministry and telecoms regulator said on Wednesday.

The telecoms industry is seen as the big prize in Prime Minister Abiy Ahmed’s push to free up the economy, but efforts to lure investment have been hit by a nearly two-year war in northern Tigray that has killed thousands and uprooted millions.

The government is asking international companies to submit expressions of interest for the partial sale of Ethio Telecom, a finance ministry document showed.

Ethiopia’s Communication Authority (ECA) said it had also revived plans to issue a second full-service telecoms licence, for a third telecoms company.

“ECA now plans to resume the licensing process for a third license or the second new full-service nationwide telecommunications license,” it said in a statement.

The regulator was inviting potential bidders and any interested parties to participate in a consultation process, it added.

The regulator intended to launch a formal tender process for the licence by the middle or end of January 2023, its director general, Balcha Reba, told Reuters.

The moves by the finance ministry and the ECA come after Ethiopia’s federal government and regional forces in Tigray signed a ceasefire agreement on Nov. 2 to end the fighting.

In March, the government said it had postponed the planned partial privatisation of Ethio Telecom because of the prevailing economic environment, both at home and abroad. The tender for the partial sale had been launched in June 2021.

The finance ministry document showed Deloitte Consulting Limited had been appointed as transaction adviser on the proposed partial privatisation of Ethio Telecom, giving companies until Dec. 20 to submit expressions of interest.

The telecoms regulator said it had set a Dec. 16 deadline for comments from interested parties and potential bidders.

“The comments and feedback from this consultation will guide the next steps of the licensing process,” it said.

The tender process for the second licence had been suspended in December 2021 after proposals were sought that September.

In May 2021, a consortium led by Kenya’s top operator, Safaricom SCOM.NR, won the first international licence with a bid of $850 million, which could serve as a guide price for the other licence.

Safaricom Ethiopia started operations in October.

(Reporting by George Obulutsa; Editing by Alexander Winning, Estelle Shirbon and Clarence Fernandez)

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