BusinessNewsScience & Tech

Nation Puts Process to Partially Privatize Ethio Telecom on Hold

ADDIS ABABA – Ethiopia has postponed the bidding process to partially privatize the state-run telecom service provider, Ethio Telecom, authorities said on Friday.

The Government proposed a partial privatization of Ethio Telecom by selling 40% of the equity share capital of the firm.

Authorities issued a Request for Proposal (RFP) for the service license on September 28 2021, which generated interests from some top global firms including France’s Orange.

“The Government of Ethiopia has had discussions with several bidders,” said the ministry of finance and Public enterprises Holding and administration agency in a joint statement on Friday.

However, “given the recent developments and fast-moving macroeconomic changes both globally and from a country perspective,” the two offices said, the government “has chosen to postpone the privatization process.”

“The Government of Ethiopia believes that taking time to accommodate the improved macroeconomic situation as well as continually improving financial performance of Ethio Telecom will result in better value for all the parties involved and in particular the citizenry of Ethiopia,” the statement added.

Authorities also said the government “remains committed to finalizing the privatization process and looks forward to re-engaging in due course with existing and additional parties that have expressed interest in the RFP.”

The Government of Ethiopia laid out the framework for the privatization of public enterprises under the Public Enterprises Privatization Proclamation No. 1206/2020.

The push to partially sell-off the Ethio Telecom is a part of the government’s plan to open up Ethiopia’s economy and improve the efficiency of public enterprises and enhance their competitiveness.

Ethiopia already issued a telecommunications license to a Safaricom Plc-led consortium after the group, which includes Vodafone, Vodacom, Safaricom, Sumitomo Corporation, and the CDC Group, won the bid offering $850 million, in May, 2021.

The new company, Safaricom Ethiopia, is expected to start competing with Ethio Telecom when it officially starts operations next month.

Ethio Telecom generated 28.5 billion birr revenue in the first half of the current fiscal year alone, and has 60.8 million.subscribers, covering about half the population.