Ethiopia Gets Closer to Privatizing its Telecom Industry, to Begin Bidding Process
Ethiopia is going ahead with its plans to end its state monopoly on the telecommunications space despite the COVID-19 pandemic. Ethiopian Communication Authority has begun to invite interested bidders to invest in the space.
The regulator plans to award two new licenses to bidders this year, which will open up the last major closed telecoms market in the world. The new draft licensing directive will allow holders own and operate telecom networks and provide service. The country’s sole operator, Ethio Telecom, will also be applying for a new license.
With over 44 million subscribers and over 50% of its subscribers as internet users , Ethio telecom is the world’s largest telecom monopoly. Ethiopia’s place as Africa’s second-most populous country (109 million) means there’s an untapped market potential for any telecommunications provider.
The new licences will open up the space to more investments from bidders and force innovation in the country. With new players coming into the game, the competition will increase and citizens will be able to choose their service providers based on offerings. It will also provide sources of income for several thousand people, from direct employment and other indirect services.
The privatisation of the space is also expected to boot the country’s economy. The second most populous African country, which was once one of the world’s fastest-growing economies, has seen its growth slowed down in recent years. The country is also taking a huge blow amid the COVID-19 pandemic.
The introduction of two new competitors and the partial privatization of Ethio Telecom in the next several months will significantly benefit the economy in general and telecom customers in particular.Zemedeneh Nigatu, investment consultant.
According to reports, Kenya’s Safaricom, France’s Orange, South Africa’s MTN, UAE’s Etisalat and Zimbabwe’s Econet Global have indicated an interest to roll out services in the country.
For licensees, the regulator has also warned that it could be revoked should their services pose a threat to national security or public morality. Players will also be required to provide their services in the various languages spoken by the regions whose official language is different from Amharic – all which are standard requirements.
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