And then there were three: Ethiopia opens process for new telco licence

Balcha Reba Ethiopian Comms Auth.jpg

Ethiopia has called for proposals for a second private telecoms operator to compete with Ethio Telecom, the incumbent, and Safaricom, licensed earlier this year.

The Ethiopian Communications Authority (ECA) has published a request for proposals (RFP) for a second full‐service telecommunications licence.

It is inviting both international and national telecommunications companies to take part in the sealed bidding process, the ECA said yesterday.

Licence B, as the ECA is calling the new licence, will be issued in January 2022. The deadline for responding to the RFP is 20 December, said the ECA.

Balcha Reba (pictured), director general of the ECA, said: “The goal of liberalising our telecoms sector has always been to drive competition and attract greater private sector investment as a key part of Ethiopia’s digital transformation.”

The ECA said that the winner of the new licence will be able to offer mobile financial services and will have additional spectrum allocation. The regulator “will have revised pre‐qualification criteria to include participation from a wide range of international and national telecommunications operators”, it added.

Ethiopia always planned to introduce two private competitors to Ethio Telecom, but only one bid satisfied the criteria – that from the Global Partnership for Ethiopia, which is backed by Safaricom, Sumitomo, Vodacom and Vodafone, as well as by UK and US-backed government funds. That will operate under the Safaricom brand and the consortium has said it will spend US$8 billion on the infrastructure. MTN underbid for that licence

At the same time the government two weeks ago started the process of selling a 40% stake in Ethio Telecom. Orange has already announced its wish to bid.

The ECA said that, since winning the first licence, the Safaricom consortium “has quickly established its local headquarters in Addis Ababa and is preparing to launch its services to the Ethiopian people”.  

Balcha said: “Following our successful first licence issuance earlier this year to one of the world’s largest international telecoms consortia, we have continued with our mission and now want to encourage more telecoms operators, of all sizes, to be part of this exciting opportunity.”

He said that the part-privatisation of Ethio Telecom was “a separate process due to be concluded before the closing date for the Licence B bid submission deadline”.

He added: “At the end of the licensing process, there will be three operators with licences to deliver high‐quality telecommunications services in Ethiopia: Ethio Telecom, Safaricom Telecommunications Ethiopia and the new Licence B holder.”

The ECA said that, after it receives submissions to the RFP, “the final selection will be announced following a thorough evaluation of the proposals according to the pre‐defined criteria, and the Licence B will be granted to the winning applicant, in accordance with the Communications Services Proclamation of Ethiopia”.