It is a huge, underserved market but the war in Tigray could blunt investors’ appetites
Ethiopia’s government is revisiting plans to sell a stake in the state-owned operator Ethio Telecom and to license another operator to fuel competition in the country. Ethiopia has a population of more than 100 million but mobile penetration is below 50% and so is potentially a hugely attractive opportunity.
However, the war in northern Tigray has been waged for almost two years, killing thousands and displacing millions of people.
A 40% stake in Ethio Telecom was previously put up for sale but the government backed out in March this year, blaming local and global events and rapid changes to the macroeconomic environment.
Now Reuters says the government will now proceed with the sale and Ethiopia’s Communications Authority will look to award another operating licence, following in the footsteps of Safaricom Telecommunications Ethiopia which was awarded such a licence in May last year. It is owned by a consortium including Vodafone, VodacomandSafaricom, plus British finance development agency, CDC and Japan’s Sumitomo.
Until that licence was granted, the Financial Times called Ethiopia Telecom “the world’s largest remaining telecoms monopoly”.
MTN’s bid for a licence was rejected, so it remains to be seen if it will be interested this time. Orange and e& (formerly known as Etisalat) are expected to reassess the opportunity when the second licence is put out for tender.