Ethiopia Suspends Entry Of Foreign Telcos In Privatization Plans

Ethio Telecom [Photo/Courtesy]

The Ethiopian government has suspended the entry of foreign telecommunication companies into the country following its invitation to bidders in an effort to privatize Ethio Telecom, the country’s only Telecom.

The decision was arrived at after the government reviewed the list of interested bidders keen on entering the Ethiopian market by buying a stake in Ethio Telecom.

Ethiopia made the invitation to foreign telecom companies as part of its homegrown economic reform agenda launched in 2019. Ethiopia invited the companies to buy a 40 per cent stake in Ethio Telecom, in efforts to end monopoly in the sector and liberalize the country’s economy.

So far, the privatization plans have attracted international companies including Helios Towers, a UK based giant telecom infrastructure developer.

The East African reports that the decision to lock out foreign telcos may not affect regional companies such as Kenya’s Safaricom with its parent, Vodacom who submitted its expression of interest to enter the Ethiopian market last month.

Read: Manufacturing Firms In Kenya Moving To Ethiopia, Egypt Over High Cost Of Production

Ethiopia’s telecom sector transformation comprises of Ethio Telecom, the sole supplier of telecom services in the country and Ethiopian Communication Authority (ECA) which is in charge of licensing for the two international companies that will be successful in entering in the country.

ECA’s attempts to privatize Ethio Telecom have angered its officials, who claim to have spent billions of dollars building the telecom infrastructure across the country.

The East African further reports that several foreign telecom infrastructure companies have already approached the Ethiopian authorities seeking to enter the market with intentions to build new infrastructure and lease out telecom towers and rent other facilities for other incoming companies.

In protest, Ethio Telecom officials have protested and filed a letter of complaint seeking the government’s intervention on the matter.

Read Also: Ethiopia Responds to Reports of Tense Relationship Between Its Prime Minister Abiy Ahmed and Kenya President Uhuru Kenyatta

“The government has decided not to allow foreign telecom infrastructure companies. They will not be allowed to operate here,” Ethio Telecom chief executive Frehiwot Tamiru told the media.

Ethio Telecom intends to earn a substantial amount of money through rent collected from the successful entrant companies.

“We have built sufficient telecom infrastructures like fibre cables and mobile base masts that we can rent it to the newly entering companies. So the incoming telecom operators will either use our existing infrastructure by renting or build their own,” she added.

Read Also: Ethiopia Suffers Sh10 Billion Loss Following Internet Shut Down

Ethio Telecom also wrote a letter to the ECA expressing concerns over the whole privatization process. They are still awaiting a response.

“We do not believe that the authority will take any action that could jeopardise Ethio Telecom’s existence,” said Ms Frehiwot. “But there are still some issues that we have not agreed on,” she added.

12 international companies have so far expressed interest to buy the 40 per cent stake in Ethio Telecom to grab a share in Africa’s fastest-growing economy.

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Written by Vanessa Murrey

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