Telcos Lose Out As Ethiopian Gov’t Shelves Plans To Privatize Ethio Telecom

Ethio Telecom [Photo/Courtesy]

The Ethiopian Communications Authority (ECA) has suspended plans to privatize Ethio Telecom.

The ECA announced in May that the Ethiopian government would be open to selling a 40 percent stake in the state-owned company. The announcement attracted bids from the regional and international front.

Safaricom and its Parent Company, Vodacom applied for the bid along with other international companies such as Orange, MTN South Africa, Etisalat and Saudi Telecom

In early August, the country announced that it would not consider bids from foreign or international companies. However, regional companies were not affected and there was still some hope for the Kenyan giant telco to enter the Ethiopian market.

However, the opportunity was short-lived as the ECA has now suspended plans to privatize Ethio Telecom.

Ethio telecom, which is Africa’s oldest telco, currently provides mobile and internet services to more than 40 million of the 115 million Ethiopian population.

In recent times, locals have complained of slow, unreliable internet connection and poor network quality from the company. This has been attributed to the company’s unwillingness to upgrade its infrastructure and repair or replace its outdated facilities.

The ECA had cited such concerns when it rejected bids from foreign players, saying that they had intentions of overhauling and building the infrastructure from scratch. The ECA drafted a complaint to the government indicating that they had spent billions in building the infrastructure and were looking to monetize from renting it out to the successful bidder.

According to Technext “The shutting out of potential private equity investors in Ethio Telecom will impact the number of its mobile subscribers and the extent of its mobile broadband penetration. This is because the state-owned company will remain the sole mobile network operator and Internet service provider in Ethiopia.”

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Written by Vanessa Murrey

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