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Ethiopian telecoms regulator is on a charm offensive

By Quentin Velluet
Posted on Monday, 18 November 2019 14:41

Ethiopian Prime Minister Abiy Ahmed speaking in parliament on 22 October. REUTERS/Tiksa Negeri

The head of the Ethiopian telecoms regulator, Balcha Reba, attended the AfricaCom trade fair in Cape Town last week to promote the East African country’s plans for economic liberalisation.

Reba issued a final call for applications for two new telephone operator licences – to be granted in mid-March 2020 – and the acquisition of a 49% stake in the national operator, Ethio Telecom.

Ethiopia has grabbed the spotlight since Prime Minister Abiy Ahmed was awarded the Nobel Peace Prize in October this year. Reba, Director General of the fledgling Ethiopian Communications Authority (ECA), is planning to take advantage of it.

Wooing investors

During the event, Reba was presented as the key man in the country’s economic liberalisation.

  •  “We urge you to come and invest in Ethiopia because it is a huge market of more than 100 million people. It is an immense opportunity to come as an operator or service provider not only in telecoms, but also in the general ecosystem of information and communication technologies,” says Reba, a former senior official of Ethiopia’s Ministry of Innovation and Technology.
  • Two days before his address at AfricaCom, Reba engaged in the final stages of consultations that will come to an end on 22 November. He gathered investors in Addis Ababa to listen to their demands and discuss the regulatory framework for the sector.

Vague outlines

So far, 22 candidates, including Kenya’s Safaricom, have reportedly expressed an interest in buying a licence. As for Ethio Telecom, the process remains unclear even though the company recorded a turnover of 10.1 billion Ethiopian birr (about €311m) in the first quarter of 2019, up 21% compared with the same period the previous year. Its subscriber base also increased by 10% over the year to 44 million.

  • On the strength of these results, the national operator is attracting major investors, including Orange. Safaricom/Vodacom is also planning to form a joint venture to acquire a stake in Ethio Telecom.

Bottom Line: Ethiopia is moving ahead with plans to end its monopoly in the telecoms sector by selling a large stake of Ethio Telecom to private investors. The deal will also boost the foreign-exchange reserves of the cash-strapped country.

This article first appeared in Jeune Afrique.

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