Ethiopia May Scrap Telecom License Sale if Offers Are Too Low

ADDIS ABABA – Ethiopia has a set amount it expects to receive from the part-privatization of the country’s telecommunications industry and could scrap the process if bidders don’t meet the target.

Three independent teams have calculated the value of two new licenses that would compete with state monopoly Ethio Telecom, Eyob Tekalign, the state minister responsible for the privatization process, told reporters. That has given the government an amount it’s looking to raise from the sale, he said, without giving figures.

“If we get the value we expect from the bidding process, we will go ahead,” he said. “If not, we will have another look.”

His comments mark the first time an Ethiopian politician has publicly cast doubt over the much-anticipated liberalization of the telecom industry, a move that would jeopardize a broader privatization plan announced by Prime Minister Abiy Ahmed in mid-2018.

The strategy had a range of goals: to shore up reserves of much-needed foreign exchange, pay down state debt, improve telecom service and create jobs.

International telecom operators have long coveted a foothold in Ethiopia, which has a population of more than 100 million and is seen as one of the world’s last major untapped markets. Interested parties include Vodafone Group Plc and its two African partners, Vodacom Group Ltd. and Safaricom Ltd., as well as MTN Group Ltd. and Orange SA. Alongside the two new licenses, a minority stake in Ethio Telecom is also up for sale.