ETHIOPIA – Telecommunications regulator Ethiopian Telecommunications Authority, has invited a request for proposals for a second national telecoms license.
Marking the next phase of the widely heralded liberalization of Ethiopia’s telecoms market, the second license (License B) is due to be issued in January 2022, introducing a third telecoms operator to compete alongside Ethio Telecom and the Global Partnership for Ethiopia (Safaricom Telecommunications Ethiopia PLC), and help boost the digital transformation in the country.
Since winning the first license (License A) in June 2021, the Global Partnership for Ethiopia has quickly established its local headquarters in Addis Ababa and is preparing to launch its services to the Ethiopian people.
The licenses are considered a big prize in the country’s push to liberalize the economy, which had been one of the world’s last major closed telecoms markets.
Balcha Reba, Director General of the ECA commented: “The goal of liberalizing our telecoms sector has always been to drive competition and attract greater private sector investment as a key part of Ethiopia’s digital transformation. Following our successful first license issuance earlier this year to one of the world’s largest international telecoms consortia, we have continued with our mission and now want to encourage more telecoms operators, of all sizes, to be part of this exciting opportunity. The ECA remains committed to fulfilling Ethiopia’s telecommunications sector reform and this second license issuance is another opportunity for another telecoms operator to join Ethiopia’s fast-growing economy next year.”
A consortium led by Kenya’s top operator Safaricom won the first licence and its winning bid of US$850 million could serve as a guide for the price of the remaining licence.
South Africa’s MTN Group also bid in the first round but it was not awarded a licence.
In August 2021, the company said it would not resubmit a bid for a licence in the country.
The second licence will include mobile financial services, ECA said, adding that proposals had to be delivered by 20 December.
State monopoly Ethio Telecom, which launched a new mobile financial service called Telebirr in May 2021, attracted four million users within weeks, showing the market’s potential.
In August 2021, a senior adviser at the ministry of finance said that World Bank’s private sector arm, International Finance Corporation, will serve as transaction adviser in the deal for the second licence issuance.
A separate sale of a 40% stake in Ethio Telecom is also ongoing.
Opening Ethiopia’s telecommunications market to greater competition will maximize the opportunities presented by the digital economy: reliable and accessible communications for the Ethiopian people leading to improved quality of life, improved connectivity to support rapid economic transformation and growth, job opportunities as a result of having best in class tech, and both local and inward investment.