AfricaSafaricom led Consortium clinches US$ 850 Million Ethiopia license

Ethiopia’s first telecoms licence sale was labelled the ‘sale of the century’ by the government of PM Abiy Ahmed © Reuters

A license to operate telecommunication services in Ethiopia has been awarded to Kenya’s telco giant Safaricom in a consortium made up of Vodafone, Japan’s Sumitomo and UK finance agency CDC Group.

License top bidders

According to Brook Taye, a senior adviser at the Ethiopian finance ministry, the Consortium paid $850 million for the licence, beating South Africa’s MTN, which had also bid for a license with an offer of US$600 Million.

Ethiopia, considered Africa’s second-most populous country, aims to open up its vast and unexplored telecoms market, creating millions of online jobs.

The Consortium plans to invest up to US$8.5 billion in infrastructure among other areas, Brook said, adding that the industry will create up to 1.5 Million job opportunities.

According to Prime Minister Abiy Ahmed, the US $8 billion investment in the country’s telecom industry is considered the most significant foreign direct investment into Ethiopia to date.

The Consortium is expected to roll out 4G services in the initial phase, according to Brook.

Balcha Reba, the Ethiopian Communications Authority director-general, said the country would soon open a bid for the remaining license.

Safaricom had purposed to pay as much as $ 1 Billion for the new license in Ethiopia.

Officials from UK-based Vodacom and CDC Group have remained tight-lipped on the Ethiopian license award, with Safaricom promising to make a statement on Monday 24th May 2021.

Meanwhile, the Ethiopian government is also preparing to sell a 45% stake in state-run mobile operator Ethio Telecom.

Earlier this May, the operator launched a mobile phone-based financial service.

At present, only Ethio Telecom will offer mobile financial services as foreign operators are currently barred by law from participating.

However, Prime Minister Abiy Ahmed said that the country would open up its mobile financial services to competition after one year.

Jackson Okoth from The Kenyan Wall Street Contributed to this article

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