MTN ‘might make second bid’ to win Ethiopia licence

MTN ‘might make second bid’ to win Ethiopia licence

02 June 2021 | Alan Burkitt-Gray

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MTN is considering making a second attempt to win a telecoms licence from Ethiopia, the CEO has told shareholders.

Ralph Mupita (pictured) said that MTN has “not made a firm decision”, but will “apply our minds” if Ethiopia reopens bidding for a second licence.

The government last week awarded one licence to a consortium backed by Vodafone, with Vodacom and Safaricom, which are members of the same group.

But Ethiopia, which had planned to offer two licences to compete with Ethio Telecom, did not award the second. The government had received only two bids for two licences by the deadline in April.

MTN bid only US$600 million for the licence, compared with the Vodafone-backed group’s $850 million.

Mupita said: “We took an approach that the opportunity, as strategic as it was, needed to meet our capital allocation framework and the hurdles that we saw given the licence conditions.”

South African-based MTN had hoped that Ethiopia would allow it to offer mobile money services, but the government changed the rules after the deadline: in early May it said that licensees could offer services, having earlier denied the possibility.

“There are views that the Ethiopian authorities will reissue the licence with mobile money,” said Mupita. “We certainly priced for those things and near-term risks that we saw, and we felt that the financial bid there was appropriate.”

However, if Ethiopia did re-open the bidding, with the clear possibility that a winner could offer mobile money, it is possible that others would re-enter the competition.