Safaricom-1

According to sources, Ethiopia’s telecommunications regulator has granted an operating license to a consortium formed by Kenya’s Safaricom and Japan’s Sumitomo, ending the state’s monopoly on the country’s crippled telecoms industry.

Brook Taye, a senior advisor at the finance ministry, said on Saturday that the consortium, which comprises Vodacom, Vodafone, and the British development financing agency CDC Group, paid $850 million for the license.

MTN of South Africa had also applied for a license, but their proposal of $600 million was considered insufficient.

According to the government, the Safaricom-led partnership would generate up to 1.5 million new employment and $8.5 billion in investment over a 10-year period.

In a tweet, Prime Minister Abiy Ahmed remarked, “This would be the single greatest FDI [Foreign Direct Investment] into Ethiopia to date.” “Our goal of making Ethiopia entirely digital is on track. I’d want to thank everyone who took part in making this a very transparent and effective process.”

Abiy’s administration had expected to grant two new telecommunication licenses, but in late April it reported that just two bids had been received after some corporations that had earlier showed interest, notably France’s Orange and the UAE’s Etisalat, chose not to compete.

The Ethiopian Communications Authority’s director-general, Balcha Reba, said the second license will be re-tendered soon.

The licenses are expected to result in a financial inflow, new employment, and infrastructure investment.

According to Brook, the Safaricom-led consortium will supply 4G and 5G internet services, and by 2023, a low-orbit satellite will be in place to give statewide 4G coverage.

“A historic day for Ethiopia!” he tweeted.

“Imagine the improved service and efficiency, the new possibilities, millions of new employment, and the revolutionary influence on our economy!”

Ethiopia’s telecommunication reforms also include a proposal to sell a part in Ethio Telecom, which officials think would increase the firm’s efficiency.

1 Comment
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