MTN, Vodacom vie for Ethiopian licences
Cellular giants eye a piece of the pie as Africa’s second-most populous country goes on liberalisation drive
MTN AND GLOBAL Partnership for Ethiopia – a consortium including Safaricom, Vodacom and their parent Vodafone – are in the running for Ethiopia’s two new nationwide telecoms service licences.
The Ethiopian Communications Authority (ECA) confirmed that MTN and the Global Partnership for Ethiopia had submitted bids following a request for proposals a year earlier.
The ECA said that it would announce the winners of the two licences and make a formal public announcement after the technical and financial evaluation was completed.
Monday marked the deadline for the two new nationwide telecoms licences.
MTN, Africa’s largest mobile operator, said it would participate with equity partners for the licence, which represented the last and largest telecoms liberalisation opportunity in the world.
MTN president and chief executive Ralph Mupita said the group had been guided by its capital allocation framework in its assessment of the opportunity.
“Ethiopia provides the largest telecommunication and digital services growth opportunity in Africa over the medium term and fits into our Pan-Africa focus and platform strategy,” Mupita said.
In August last year, MTN announced its exit from the Middle East market in the medium term by first exiting its 75percent Syrian subsidiary.
MTN said it would focus solely on its Pan-African market, spin off fintech into a standalone business, pay down debt as part of Ambition 2025 its blueprint for growth.
Ethiopia, Africa’s second-most populous country after Nigeria is liberalising its telecoms sector after doubling
the gross domestic product in the last 10 years.
According to the ECA, the government’s primary aim was to increase reliable and efficient communications services, leading to improvements in quality of life and in connectivity to support rapid economic transformation, and to maximise the opportunity presented by the digital economy.
Vodacom chief executive Shameel Joosub said that the Global Partnership for Ethiopia had a unique mix of experience and know-how to help transform the country into a modern digital economy and to positively impact on the lives of Ethiopians.
“We are submitting a strong tender as the Global Partnership for Ethiopia consortium led by Safaricom,” Joosub said. “It is never an easy job to open up a country’s telecoms market, yet the Ethiopian government has managed to move forward with a large number of the regulations required for the benefit of 110 million Ethiopians,” Joosub said.
Joosub said the Global Partnership for Ethiopia which included Safaricom, Vodacom and their parent company, Vodafone had the support of CDC Group, the UK’s development finance institution and impact investor, Sumitomo Corporation, one of the largest trading and business investment companies, and the USs’ International Development Finance Corporation.
The head of equities at Cape Town based Mergence Investment Managers, Peter Takaendesa, said: “The proposed exposure to Ethiopia and following a partnership approach is largely in line with MTN’s recently communicated strategy to balance reducing debt on the balance sheet while continuing to invest for long term growth in Africa.”