Ethiopia awards new telecoms licence to Vodafone consortium

ADDIS ABABA –

Ethiopia awarded a new telecommunication licence to a consortium including the UK’s Vodafone Group, paving the way for a long-awaited opening of the sector to outside investors.

The government also called off the sale of a second new permit, but will invite fresh bids from international wireless carriers after some policy adjustments, according to Brook Taye, a senior adviser at the Ministry of Finance.

The winners - Vodafone, Vodacom Group, in which the British carrier has a majority stake, and Nairobi-based Safaricom Ltd. - will invest $8.5 billion in their network during the coming 10 years, including the licence fee, he said from the capital, Addis Ababa.

The consortium  submitted  a bid of $850 million for the permit, according to people who declined to be identified.

“The company will enter a commitment of creating 1.1 million jobs in 10 years and cover the country with a 4G service by 2023,” Taye said.

The government had  received two offers.

The other was from MTN, Vodacom’s Johannesburg rival, and partners including the Silk Road Fund, a Chinese state investment group. The decision to open up the telecom industry was taken in mid-2018 and seen as central to Ethiopian Prime Minister Abiy Ahmed’s plans to reform the economy.

But the process has been hit by numerous setbacks, including the coronavirus pandemic, delayed elections and the regulatory complexity that comes with organising the sale.

The business case for phone companies was at first straightforward: Ethiopia has a population of more than 110 million, the second-largest in Africa, yet less than half its people have mobile-phone subscriptions. – BLOOMERG NEWS.