Safaricom ‘putting together consortium’ for $1bn Ethiopia licence bid
Michael Joseph, acting CEO of Kenyan operator Safaricom, has confirmed the company wants to bid for a telecoms licence in neighbouring Ethiopia in partnership with Vodacom and other companies.
Safaricom, which is 35% owned by Vodacom, also issued a statement to the Nairobi Securities Exchange saying that it is looking for partners for the Ethiopian venture.
The government of Ethiopia has made a number of moves to introduce competition into the telecoms market and to privatise the current monopoly operator, Ethio Telecom. Last July it said it planned to follow the example of Myanmar, with an initial two new operators to compete with the incumbent.
However, most early predictions of the timescale for the process have fallen way behind.
Safaricom said it will make an offer to Ethiopia by April 2020, though Ethiopia has set a deadline of 22 November 2020 for companies to show interest in a telecoms licence. Ethiopia has said it will award licences by April 2021.
Joseph (pictured) told Nairobi’s Business Daily newspaper that Safaricom has “not yet made a decision on the source of funding because the constitution of the consortium has not been finalised”.
He told the paper that Safaricom wants to be part of a joint bid because of the likely high entry costs. He put the cost at about $1 billion in licence fees and network costs. “It’s a consortium because it’s a big investment. I cannot provide names.”
According to its latest annual report, for the year ending 31 March 2019, Safaricom had revenue of 250 billion Kenyan shillings ($2.47 billion) and earned profit before tax of 91 billion shillings ($900 million).
Michael Joseph, who was CEO of Safaricom from 2000 to 2011, became acting CEO in July last year on the death of his successor, Bob Collymore, a former BT executive.