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Global consortium wins telecom license in Ethiopia
A license to operate telecommunication services in Ethiopia has been awarded to a consortium made up of Safaricom, Vodafone, Japan’s Sumitomo and UK finance agency CDC Group. The consortium plans to invest up to $8.5 billion in infrastructure among other areas adding that the industry will create up to 1.5 million job opportunities. Zemedeneh Negatu, Global Chairman at FairFax Africa Fund joins CNBC Africa for more.
Mon, 24 May 2021 10:19:55 GMT
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AI Generated Summary
- The award of the telecom license to a consortium led by Safari, Chrome marks the onset of significant reforms in Ethiopia, with implications across multiple sectors like manufacturing, agriculture, and financial services.
- The geopolitical implications of the telecom sector in Ethiopia highlight the country's growing importance on the global stage, positioning it as a focal point for major economic powers like the US and China.
- The upcoming phases of privatization and licensing in the Ethiopian telecom sector are poised to revolutionize the industry, ending years of monopolistic control and paving the way for increased competition and innovation.
Ethiopia is on the brink of a new era as the government recently awarded a license to a consortium comprised of Safari, Chrome, Vodafone, Japan's Sumitomo, and the UK's CDC Group, to operate telecommunications services in the country. The consortium plans to invest a staggering $8.5 billion in infrastructure, paving the way for an array of job opportunities, with estimates reaching up to 1.5 million. Zemedeni Nigatu, Global Chairman at AffairFactsAfricaFund, shared insights on this monumental development, emphasizing the transformative potential it holds for various sectors within Ethiopia. The move towards privatizing the telecom sector marks the beginning of a series of exciting reforms that are set to reshape the Ethiopian economy. The awarding of the license to the consortium led by Safari, Chrome, with a majority stake, signifies a pivotal moment for the country's telecommunications landscape. This step not only promises advancements in the telecom sector but also sets the stage for broader economic transformations, including manufacturing, agriculture, and financial services, all of which rely heavily on a modern and reliable telecom infrastructure. The impending liberalization of the sector is poised to usher in a wave of progress and prosperity for Ethiopia, unlocking new opportunities and paving the way for sustainable growth. The geopolitical implications surrounding the telecom sector in Ethiopia have sparked discussions about the global power dynamics at play. The involvement of companies backed by different economic powers, such as the US and China, has fueled speculations about underlying geopolitical rivalries. However, Zemedeni Nigatu highlighted that the attention and interest from these global players ultimately benefit Ethiopia, positioning the country as a key player in the African landscape. While the telecom sector has garnered significant attention due to its strategic importance in the global arena, the ripple effects of this decision extend far beyond mere commercial interests. Ethiopia's growing significance on the global stage places the country at the center of a complex interplay between major economic powers, signaling a new chapter in its economic development. The competition between bidders supported by different countries underscores Ethiopia's strategic value, drawing parallels to a proxy war of economic influences. The emergence of new entrants into the Ethiopian market, particularly from neighboring countries like Kenya, further underscores the potential for cross-border collaborations and investments. As Ethiopia embarks on the journey of telecom liberalization, the upcoming phases of privatization and licensing are crucial milestones that will shape the future of the sector. The government's plan to privatize 40% of Ethiopia's telecom sector in the near future signals a significant transformation in the country's economic landscape. With the potential entry of multiple telecom operators into the Ethiopian market, the era of monopolistic telecom control in the country will come to an end, opening up new avenues for competition and innovation. The timeline for the next steps in the telecom transformation has been outlined, with the signing of agreements with the Safari consortium set to take place soon. The re-issuance of tenders for the second license and the subsequent awarding of the telecom licenses by September are expected to catalyze a wave of developments in the sector. By the end of the summer, Ethiopia is poised to witness the emergence of three telecom operators, marking a significant shift from the historical monopoly that has long characterized the telecom industry in the country. With a series of reforms and privatization initiatives on the horizon, Ethiopia's telecom sector is on track to undergo a massive transformation that will not only reshape the industry but also fuel economic growth and job creation on a substantial scale.
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