Ethiopia to Open Telecom Sector to Multinationals, Sell Minority Share in Ethio Telecom
July 6, 2019 (Ezega.com) -- Ethiopia announced it will soon sell 49 percent stake in Ethio Telecom to private companies. It will also open the telecom sector to two other competing multinational companies, in addition to Ethio Telecom.
Ethio Telecom, which is 100 percent owned by the Ethiopian government, has so far been the sole owner of the telecom space in Ethiopia.
In a statement to the media, State Minister of Finance Eyob Tekalign said the government will also offer a minority stake in Ethio Telecom, and foreign firms will be invited to bid.
There will be 'two plus one' operatores, said Eyob Tekalign, meaning two new competitors plus Ethio Telecom with a minority private owner.
He said the Ministry of Finance will invite global companies to take part by issuing request for interest in the next few months. World bank is consulting the Ethiopian government with this privatization. The government expects 50 to 60 expression of interest, he said.
Ethiopia has a population of more than 100 million people and is believed to have a huge potential in this space.
Due to the state monolpoly, the country is one of the least developed in telecommunications infrustructure. As a result, Ethiopians pay high premiums for internet and mobile phone services, the quality and speed of which are generally poor and unreliable.
Internet penetration in Ethiopia is low, estimated to be around 15 percent. And, according to the government, there are 40 million mobile subscribers in Ethiopia today.
The entry of foreign companies is expected to change all that and spur businesses in other sectors as well, if all goes according to plan.
Among those expected to bid for the Ethiopian market are Vodafone, South African operator MTN, France's Orange and Etisalat of the United Arab Emirates.
Although the move to privatization is welcomed by many, there are concerns regarding the transparency associated with such big moves. The opening of Telecom sector is expected to generate fierce competition from various governments and companies. Concerns with corruption, political considerations and inadequate planning are among the top in the minds of many Ethiopians. It remains to seen what, if any, the Ethiopian government will do to assure transparency and allay public fears.