A brief guide to Ethiopia’s attempts to licence a third operator

A brief guide to Ethiopia’s attempts to licence a third operator

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A third request for qualifications has just been launched

Following a number of delays, Ethiopia’s request for qualifications (RFQ) for the second new nationwide full-service telecommunications license has been launched, with the ECA (Ethiopian Communication Authority) releasing a call for proposals on their website.

The government initially sought to bring in two new licence holders when it approved Safaricom Ethiopia’s proposal in May 2021, but it only received one other bid. The $600m proposal from South Africa’s MTN was rejected, while Orange and E& expressed interest but didn’t end up submitting proposals.

The process was relaunched in September 2021 but suspended in December due to a lacklustre response that was attributed by many to the armed conflict occurring in the Northern Tigray region.

The third attempt to issue a new licence was kicked off in November 2022, alongside a peace-treaty signed between the warring factions. A third licence holder will have an uphill battle to compete with former monopoly Ethiotel, who have 70 million subscribers.

Alongside the peace-treaty and the plans to relaunch the RFQ, the Ethiopian government once again put in to place plans to sell a 40% stake in Ethio telecom, aiming to raise $675 million.

Winner of the first RFQ process in May 2021, Safaricom Ethiopia, has got off to a flying start, surpassing the 25% nationwide coverage it was required to hit as part of its licence, and acquiring over 4 million customers since launching commercial services in October last year.

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ECA’s press release announcing the RFQ process reads as an overt plea for international operators to invest in the country, stating that “there are several positive developments occurring in the Ethiopian telecommunications sector since the beginning of the liberalisation process including a strong telecommunications sector legal and regulatory framework, a legal framework to provide mobile financial Services, and availability of additional spectrum.”

The Ethiopian Finance Ministry reported that E& and Orange were yet again interested in the licence, as were Netherlands-based VEON.

The deadline for responding to the RFQ was announced as September 15 2023.


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