MTN, Vodafone Groups plan entrance into Ethiopia’s untapped telecoms markets

Charles Abuede

Africa’s telecommunications giant, the MTN Group and a syndicate led by Vodafone Group Plc have tendered for operation licenses in Ethiopia as the wireless service providers prepare to tap the largest telecoms market in the world. Brook Taye, an adviser of the country’s finance ministry revealed on Monday that it will take a few days to review the technical offer and then open the financial bids.

Elsewhere on Monday, Safaricom Plc, Kenya’s largest telecommunications provider, said in a notice that it was bidding for one license in association with Vodafone and Vodacom Group Limited Others in the consortium including CDC Group Plc and Sumitomo Corp.

In the statement of Brook Taye, “We always wanted quality providers and this is what we have received. These are two African giants — the Safaricom-led consortium and MTN — either one or two of the operators will get a license in Ethiopia.”

This development comes even as the most populated nation in Africa after Nigeria battles multiple crises, including a civil conflict in the northern Tigray region, which has threatened Prime Minister Abiy Ahmed’s economic transformation agenda.

Meanwhile several international telecoms operators have long sought after a footing in Ethiopia, which has a population of more than 110 million and with only 50.7 million subscribers, and seen as one of the world’s last foremost unexploited markets. Though, the government is looking to award two full-service telecommunication licenses as part of its plan to attract more foreign investment to its economy with South Africa’s Orange Group and Emirates Telecommunications Group among the 12 players who had made known an initial interest.

Brook, however, revealed that some companies dropped out due to concerns about their abilities to access Ethiopia’s potentially lucrative mobile phone-based financial-services market under the license, and to set up some of their own key infrastructures. Nevertheless, mobile-money services are excluded under the licenses on offer, experts say, which would also require the new providers to use the existing tower networks. The new entrants will compete with Ethio Telecom, the state-controlled monopoly in which the government separately plans to sell a 40 per cent stake.