Ethiopia Could Sell Majority Stake in State Telecom Monopoly

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Bloombrg

Ethiopia may give up majority control over its telecommunications monopoly in a second phase of privatization once it’s sold 49% of the company next year.

The government could also issue more mobile-phone network licenses over the long term beyond the two already planned for March 2020, Balcha Reba, director-general at the Ethiopian Communications Authority, said in an interview in Addis Ababa.

“We have a monopoly. That’s our problem,” he said. Privatizing Ethio Telecom will improve service quality, increase choice for customers and spur investment as the country’s population of 100 million grows, according to Balcha.

“In the future, the government may even release some of its shares from the 51%,” he said, while adding that the market would first need to become competitive and more mature.

International carriers including Orange SA, MTN Group Ltd. and Vodafone Group Plc’s African unit are among companies that are interested in expanding in Ethiopia, seen as the last major market on the continent closed to independent operators. They are keen to tap a nation with a relatively low level of data penetration and internet access, as well as the second-highest population in Africa — though one that’s been prone to government-imposed internet blackouts.

Furthermore, a new communications law compels foreign operators to consent to “lawful surveillance” of customer information.

Next year’s sale will also boost the government’s scarce foreign-exchange reserves, Balcha told Bloomberg in his office in the center of the Ethiopian capital. That’s needed to pay for imports and for foreign companies to operate successfully in the country.

Mobile Banking

Ethiopia is also considering whether to issue mobile-banking licenses, Balcha said. He cited work underway at the country’s central bank to lift current restrictions. Wireless carriers have found a lucrative sideline offering financial services in many parts of Africa where formal banking infrastructure is scarce.

Yinager Dessie, governor of the National Bank of Ethiopia, did not immediately respond to calls seeking comment.

The sale of a minority stake in Ethio Telecom may lead to a review of the company’s equipment suppliers, which include Huawei Technologies Co. and Ericsson AB, Balcha said. “Whenever a company’s privatized, the 49% also have their say,” he added.

Ethiopia will add 5G technology in October, though it must first decide on the frequency band, he said.

Ethio Telecom has annual sales of about 45.4 billion birr ($1.5 billion) and more than 50 million subscribers, the company said last month.

2 Responses to Ethiopia Could Sell Majority Stake in State Telecom Monopoly

  1. amhara is very concerned for its fate as a leader of this fragemented nation , ethiopia. Amhara is producing fake prophets , mehimran , religious leaders and magicians like ehte mariam, daniel kibret, bahtawi gebremeskel who are genuine amhara messengers deceiving the gullible men and women.

    Gebremeskel was telling to the foold ethiopians for decades that Jesus will come in 1992 and there will be god chosen king et c which is completely false and revealed to him by evil spirits and devil himself. Eventually he told to his fans that GOd had told him to mary a lady aged 16 . He continued to tell that his children are decended from heaven . He is a businessman , false prophet reciting demonic book stolen from debteras .

    werkitu Tolera
    October 10, 2019 at 7:42 am
    Reply

  2. Now I can start saying the communist era is beginning to come to an end in the old country. From 1975 till now is a long, long time!!! Don’t you dare talk to me about this commies’ snake oil ‘developmental state this or that’. A government should have no business in hustling phones anyway. Administering the country properly should be its only job. The more business coming across its desk the more temptation it poses to connive and steal. As it is it is very hard to stamp out corruption and theft. Government as business ownership that is going to make such coffer draining behavior only worse. You will have too many thieves to catch. Then you will end up saying ‘if you can’t fight(win) them, join them!!! That was how more than 22 billion in US dollars was siphoned off from the nation’s coffers between 2002 and 2016 alone. Who knows how much more was pilfered between 1991 and 2002! Dare if you can track it down! I dare you all countrymen lawyers and financial experts who like to dangle your college credentials in my face on this and other websites to locate it, even one dime, one red cent!!! Slackers!!!!

    Ittu Aba Farda
    October 11, 2019 at 12:38 am
    Reply

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