Ethiopia May Issue Telecom Licenses by the end of 2020

ADDIS ABABA – Ethiopia said on Tuesday the bidding process to award telecoms licenses to multinational mobile companies will begin in October.

The East African nation is looking to auction two new mobile-network licenses and sell a minority stake in the state-owned monopoly Ethio Telecom.

The plan has so far been delayed by the Covid-19 pandemic, regulatory complexities, and a thwarted attempt to hold national elections.

On Wednesday, State Minister of Finance, Eyob Tekalign announced the bidding process will be launched next month.

“The process may take between 40 to 50 days to complete,” Eyob told a public consultation on the telecommunications reform.

During the process, the state minister said focus will be given both to financial and technical capabilities of the bidding companies, instead of “pure auction” to allocate the two licenses.

Several mobile operators feared that a simple auction process would reward the highest offer rather than taking into account international expertise or technical capabilities, according to reports.

Bidders will be assessed based on, not only their financial capacity, but also their expertise, technological and technical capacity, said the state minister.

“Companies with only financial capacity but no technical experience may not win over the process, and vice versa,” he added.

During the discussion, the president of Addis Ababa University Tassew Woldehanna has raised a question regarding the use of telecom infrastructure already built by the government.

Companies will share infrastructure with other telecom service providers in areas where investment has already been made, the state minister responded.

“Whereas, in areas where there is no enough infrastructure, they will be allowed to invest,” Eyob said, “as we have more population and landscape that need more investment”.

Telecom companies have long coveted Ethiopia as one of the last major untapped markets in the world.

The licenses will end a state monopoly in the country of 105 million populations.

In June, Ethiopian Communications Authority, the country’s communications regulator, received twelve bids for the two telecom licenses. Of these, nine bidders are telecom operators and two non-telecom operators. The remaining one submission was incomplete.

The regulator said the licenses will be awarded through a “competitive bidding process”.

By Mhret G/kristos