Ethiopia to split Ethio Telecom into two competitors, and sell shares

Ethiopia to split Ethio Telecom into two competitors, and sell shares

Ethiopia’s new prime minister is to split Ethio Telecom into two separate companies to stimulate competition – and the country will sell 30-40% to outside investors.

Prime minister Abiy Ahmed, who was elected on 2 April this year, told the country’s parliament that it will take up to two years of “intensive study” to prepare the plan.

Ahmed, who has led a wave of reforms since he came to power, indicated that a sale of stakes in Ethio Telecom or its successors would be phased over a number of years or even decades.

“Certain amounts of shares will be sold gradually in 10, 20, 30 years,” he said in his speech. “We are not giving it up in one go. It is not possible.”

He said: “There will be two telecom corporations and shares will be sold in both.”

He compared Ethiopia, which has one monopoly company to serve a market of 100 million people, with neighbouring Somalia, which has four companies for 12 million. “There needs to be competition in the country,” he said.

When Ahmed first announced a plan to sell a stake in Ethio Telecom – before he revealed his plan to split the company – two South African companies, MTN and Vodacom, both expressed interest. Vodacom is part owned by Vodafone. The country previously announced a project to offer virtual competition, with operators confined to Ethio Telecom infrastructure

Ahmed said he wanted the investment to come from companies that are among the top 10 telecoms operators in the world.

Orange had a management contract for Ethio Telecom for two years until 2012.

Gift this article