Ethiopia announces awarding of historic telecoms licence to global consortium led by Safaricom

27 May 2021

Thursday 27 May – The Government of Ethiopia has awarded the first private telecoms licence in the country’s history to an international consortium of telecoms operators under the name, ‘the Global Partnership for Ethiopia’.

The partners in the consortium, led by Safaricom Plc, include: the Vodacom Group; Vodafone Group; Sumitomo Corporation – one of the largest international trading and business investment companies; and the CDC Group – the UK’s development finance institution and impact investor.

The award, at a cost of $850 million, will enable the entry of the consortium into a state-run telecoms sector, which had been closed off to private investment since its establishment over a century ago.

Balcha Reba, Director-General of the Ethiopian Communications Authority, addresses the public during ceremony for the telecommunications licenses award, in Addis Ababa, Ethiopia

 

Telecom sector liberalisation is a key component of the Government’s homegrown economic reform agenda launched in 2018. Liberalisation aimed to introduce greater competition in newly opened-up sectors, including telecoms, and to stimulate further foreign direct investment (FDI) into the economy.

The entry of the consortium into the sector is expected to facilitate the provision of accessible, affordable, and high-quality mobile and internet services to millions of Ethiopians across the country. Increased connectivity within the country will enable greater social inclusion and will provide a boost to the Government’s ‘Digital Ethiopia’ strategy by enabling the creation of over 1.5 million new jobs and improved productivity for 3.6 million micro, small and medium sized enterprises relying on these services. The consortium, which is expected to provide 5G services in the country, will also launch low orbit satellite constellation to facilitate faster and more accessible 4G service nationwide.

H.E Abiy Ahmed Ali, Prime Minister of Ethiopia, said: “the Council of Ministers has unanimously made a historic decision allowing the Ethiopian Communications Authority to grant a new nationwide telecom license to the Global Partnership for Ethiopia, which offered the highest licensing fee and a very solid investment case. With an over $8 billion USD investment commitment over the next few years, this will be the single largest FDI into Ethiopia to date. Our desire to take Ethiopia fully digital is on track. I would like to thank all that have taken part in this and for pulling off a very transparent and effective process!”

H.E Ahmed Shide, Minister of Finance, said: “This marks a decisive point in Ethiopia’s path towards economic reform. With the liberalisation of the telecom market through a fair and transparent process, the Government has enabled every Ethiopian to access quality services at an affordable price”.

 

A member of a the Global Partnership for Ethiopia Consortium opens a suitcase containing the group’s proposal during the ceremony for the telecommunications license award, in Addis Ababa, Ethiopia

 

Peter Ndegwa, CEO of Safaricom, said: “We are excited for the opportunity to work with the people of Ethiopia to set up telecom networks to deliver a digital lifestyle. In past years, we have seen the power of digital transformation and its impact on our customers. We believe by working with all stakeholders in Ethiopia, we can deliver a similar transformation while achieving a sustainable return to our shareholders.”

Tenbite Ermias, CDC’s Head of Africa, said: “Modern, stable and flourishing economies are built on reliable affordable digital infrastructure, and access to global trade. We are ready to roll out a state-of-the-art network that will bring vital economic opportunities to tens of millions of Ethiopians, from urban dwellers to farmers, and to businesses large and small. This outcome has the power to unlock development over time and is great news for Ethiopians across the country”.

 —ENDS—

Background

In 2019, the Government of Ethiopia announced a tender for two telecoms operator licenses as part of its liberalisation efforts aimed at improving services, facilitating greater access, enhancing efficiency, catalysing the digital economy, and building a world class telecoms industry in Ethiopia.

Ahead of the tendering process, the Government carried out key legislative and institutional reforms which culminated in the enactment of the Communications Service Proclamation (No. 1148/2019) and the establishment of a new, independent regulator, the Ethiopian Communications Authority (ECA). Thus far, the ECA has issued 18 directives, regulations and frameworks aimed at laying the groundwork for the liberalisation of the Sector.

The competitive bidding for these licenses attracted 12 global telecoms giants including MTN, Etisalat, Orange and the eventual winning bidder, the Global Partnership for Ethiopia (including Safaricom, Vodacom, and Vodafone). On April 26, 2021, following a transparent bidding process, two bidders, namely the Consortium and MTN, having met the stringent criteria set out by the ECA, submitted bids worth $850 million and $600 million, respectively.

The second licence for a new telecoms operator to join the Ethiopian market is expected to be tendered by the ECA in due course.

For further information, please contact the Press Office at press@ethioembassy.org.uk

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