Ethiopia has announced plans to reopen bidding for a second telecoms operator in the country this month. Government officials said the bid would be licenced to a mobile operator who would also be given the rights to offer mobile financial services.
Ethiopia has a wide potential market, with a population of over 100 million. The government is reopening the bid after it awarded Kenya’s Safaricom with the first license, citing a lower than expected price for failing to award the second one.
“We have made some changes that can uplift its value, for instance mobile financial service,” Balcha Reba, director general of the Ethiopian Communication Authority, told Reuters.
According to a senior adviser at the Ministry of Finance, Brook Taye, World Bank’s International Finance Corporation will serve as a transaction adviser in the deal.
Operators who had submitted their bids in the first round are invited to apply again. Ethiopia Telecom believes bidders whose license had been deemed insufficient might have a strong interest based on the extended mobile services required.
“We expect to have a strong interest,” Brooke said.
The first license was awarded to a consortium led by Safaricom with an bid worth $850 million providing a base for the selection of the second bidder. Among the contenders are South Africa’s MTN, who applied but were not successful.
“At least there is a benchmark and to uplift this benchmark we are working on amending the policy,” Brook said.
He added that the automatic inclusion of the right to include mobile financial services makes it attractive, as it was not present in Safaricom’s case.
Mobile financial services in Africa have provided users with an alternative to banks. Since the inception of Mpesa in 2007 in Kenya, the sector has extended to five countries, with other players including Airtel launching their alternatives in other nations.
Ethio Telecom launched it’s own financial service, Telebirr in May this year, signing up an impressive four million users within the first few weeks.