Official: Ethiopia Signs Telecom Licensing Deal with Safaricom-led Consortium

ADDIS ABABA – The Government of Ethiopia has formally signed an operating licensing agreement with a consortium of private companies, making good on its promise to end a decades-long monopoly in the country.

The signing came three years after Abiy Ahmed’s administration announced its plan to liberalize the telecommunication sector and open it up to both domestic and foreign investment.

“Today, we signed a historic agreement with the Global Partnership for Ethiopia,” said Abiy after witnessing the awarding of the license on Tuesday.

Representatives from the firms in the winning consortium, the Global Partnership for Ethiopia — Safaricom, Sumitomo, Vodacom, Vodafone, and CDC Group — attended the signing ceremony that took place at Sheger Park in Addis Ababa.

Minister of Finance Ahmed Shide said the deal “marks an important day” for Ethiopians and businesses in the country.

The Minister, however, said more works are awaiting to modernise the sector.

“This is but an early step – we will continue to work collaboratively with partners and investors to build a modern and open telecommunications sector to improve connectivity, productivity and economic growth in Ethiopia,” the minister added.

The consortium has already paid $850 million for the license.

It is expected to introduce new services and infrastructure improvements.

“The organizations represented in our consortium are united in our commitment to effect positive social change in Ethiopia through the technology we provide,” said Shameel Joosub, Vodacom Group CEO.

The investors plan to create up to 1.5 million new jobs in Ethiopia and bring $8.5 billion in investment during the 10-year span of the agreement.

Joosub also said, “across the world we are long-term investors with a clear purpose to support countries to digitize and grow their economies, to benefit people in all parts of society and in all regions”.

Nearly 250 people including Prime Minister Abiy and President Uhuru Kenyatta of Kenya witnessed the official awarding of the telecommunications licence to the consortium in Addis Ababa.

The consortium is led by Kenya’s Safaricom which will own a 52% stake in the business, which will make them the only privately owned mobile services provider in Ethiopia.

The companies won the bidding process in May, edging out a rival consortium led by South Africa’s MTN Group, with the backing of Chinese investors.

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