Safaricom edges closer to Ethiopia entry after submitting bid


Safaricom edges closer to Ethiopia entry after submitting bid
Safaricom CEO Peter Ndegwa during the launch of the operator's sustainability report on October 14, 2020. PHOTO | COURTESY

In Summary

  • The operator is now expected to know its fate on the desired market entry in a month’s time when the Ethiopian Communication Authority (ECA) announces winners from the bidding process.
  • The country whose population is estimated at 100 million persons is seen as a last frontier for telecom companies looking to venture into new markets as markets in other countries become saturated with players.
  • Previously, Safaricom has indicated it would go for debt funding alongside its consortium partners, listed in the bid for licensing to expand operations into Ethiopia.

Kenya’s giant telco operator Safaricom has edged closer to entering the Ethiopian market after submitting its bid for two open telecommunications licenses on Monday.

The operator is now expected to know its fate on the desired market entry in a month’s time when the Ethiopian Communication Authority (ECA) announces winners from the bidding process.

Citizen Digital could not immediately verify the number of bids submitted to the ECA before Monday’s 10am deadline.

Nevertheless, Ethiopia’s communications regulator two bids for the nationwide telcom services from two giant telecom operators.

This includes a consortium of Safaricom, Vodafone Group (UK), Vodacom Group (South Africa), CDC Group (UK) and Sumitomo Corporation (Japan).

The second bidder named by ECA was the MTN Group Limited which is domiciled in South Africa.

“We are delighted to have had interest from established telecoms operators from around the world, commensurate with this unprecedented opportunity. The ECA will be looking for the best all-round partners from the bids submitted and we are confident that competitive bidding will ensure that Ethiopia gets the best deal,” said Eng Balcha, the director to the ECA.

Winners from the bids will receive the green light to start and operate mobile voice, data and SMS services only.

The opening of the two licenses is part of a bigger plan to liberalize Ethiopia’s key industries and markets which have until now remain shut to foreign participants.

The ECA, created in August 2019, is for instance part of the country’s ongoing market transformation and is tasked with promoting the development of high-quality, effective, reliable and affordable communication services.

The country whose population is estimated at 100 million persons is seen as the last frontier for telecom companies looking to venture into new markets as markets in other countries become saturated with players.

Ethio telecom, a government parastatal, is Ethiopia’s only licensed operator.

In June 2020, the ECA received 12 submissions as expressions of interests (EOIs) for the two available licenses including interests from Etisalat, Saudi Telecom Company and Liquid Telecom.

The submission of EOIs had been preceded by a public consultation process following an October 2018 decision by the Ethiopian government to liberalize the country’s telecommunications sector.

Previously, Safaricom has indicated it would go for debt funding alongside its consortium partners, listed in the bid for licensing to expand operations into Ethiopia.

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