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Safaricom CEO Michael Joseph./COURTESY.

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Safaricom granted operational license in Ethiopia

ADDIS Ababa Ethiopia May 22 – Ethiopia has granted an operating licence to a consortium of firms including Kenya’s Safaricom, Vodafone and Vodacom, officials said Saturday, a move that will end the state’s monopoly over its stunted telecoms sector.

The consortium bid $850 million for the licence, senior finance ministry adviser Brook Taye told AFP.

The shake-up of the potentially lucrative sector — currently dominated by state-owned Ethio Telecom — is a cornerstone of Prime Minister Abiy Ahmed’s economic reform agenda.

Abiy’s government planned to award two new telecoms licences, but in late April it announced it had received only two bids after some firms that initially expressed interest — including France’s Orange and the UAE’s Etisalat — opted not to submit.

The second bid of $600 million from South Africa’s MTN was “not enough” and was therefore “rejected”, Brook said. 

Balcha Reba, director general of the Ethiopian Communications Authority, told AFP that the second licence would soon be re-tendered.

The licences are expected to bring an infusion of cash, jobs and infrastructure investment. 

The Safaricom-led consortium is set to create up to 1.5 million new jobs and bring $8.5 billion in investment over 10 years, Brook said.

It will provide 4G and 5G internet services, and by 2023 a low-orbit satellite will be put in place to provide nationwide 4G coverage, Brook added. 

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“This is a great day for us and we’re very much excited,” he said. 

Ethiopia‘s telecoms reforms also include a plan to sell a stake in Ethio Telecom, a move officials hope will make the firm more efficient.  

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