News

Ethiopia resumes hunt for third operator after truce with Tigray rebels

Balcha Reba.jpg

Ethiopia’s telecoms regulator has revived its plan to seek a competitor for state-owned Ethio Telecom and new rival Safaricom, which has been in business just months.

The Ethiopian Communications Authority (ECA) said this morning that is launching what it called a “stakeholder consultation” about resuming the search for a new competitor.

The ECA began this process in September 2021 but suspended it in December, saying that it had received “concerns and requests from several prospective bidders to delay the process”.

Balcha Reba (pictured), director general of the ECA, said this morning: “This process is a continuation of the first successful transaction that ensured the entry of a private sector operator in the telecommunications sector in Ethiopia.”

Interested parties have a month from today – until 16 December 2022 – to provide their comments. The ECA is calling this full-service licence “licence B”, as the incumbent, Ethio Telecom, existed before the ECA and licence A went to the Safaricom-dominated Global Partnership for Ethiopia.

The ECA licensed the Safaricom consortium, part-owned by Safaricom Kenya, Vodafone, Vodacom, Sumitomo and the UK government’s British International Investment, to compete with Ethio Telecom.

The Ethiopian government was planning to sell a 40% stake in Ethio Telecom to a private-sector investor – with Orange often tipped as the likeliest candidate – but it put that on hold.

The ECA did not give any clear reason for resuming the search for a new competitor, but one reason could be the prospect of peace in the northern province of Tigray.

The Ethiopian government, led by prime minister Abiy Ahmed, signed a truce on 2 November with the Tigray People’s Liberation Front, leading to hopes of a long-standing peace after years of conflict.

Abiy told the parliament in Addis Ababa this week: “We have moved one step forward. We have discussed, agreed and signed. The next thing expected from us will be to implement honestly what we have promised to make the peace sustainable.”

The ECA said that “at the end of the licensing process, there will be three operators with licences to deliver high-quality telecommunications services in a competitive sector in Ethiopia”.

Balcha said: “[The] ECA always welcoms stakeholders’ participation and engagement in this consultation process, which allows potential market players to contribute to the sector they will be participating in, and is grateful for the insights shared by such experienced market players.”

Capacity has asked for comments from Ethio Telecom and Safaricom.