While confirming his interest in the Ethiopian market through a potential equity investment in Ethio Telecom, Stéphane Richard, Chairman and CEO of the French operator Orange, finds the prospect of acquiring one of the two new licences – to be granted in mid-March – more appealing than that of purchasing a minority stake in the country’s sole operator:
- “I’m wary of those nudging me towards Ethio Telecom,” he said December 4, at Orange’s 2025 strategy presentation.
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Orange operates in 18 countries on the continent via its Orange Middle East and Africa (OMEA) entity.
According to the executive, the country’s political situation and market characteristics, on top of Ethio Telecom’s own specificities, add a layer of complexity to the process:
- “It’s a monopolistic incumbent operator in a former communist country. When it comes to performance, I don’t think it’s up there with the world’s top players,” he said ironically, highlighting the obsolescence of Ethiopia’s 2G network.
An IPO of the OMEA division is “technically ready” to hit the market
- “We’re aware of the country’s privatisation plans but we don’t have in-depth knowledge of the terms,” he said, adding that Orange has opened an office in Addis Ababa to foster communication.
With nearly 100 million residents, a low mobile phone penetration rate and an entire network to be built from the ground up, Richard still thinks Ethiopia is an “exciting” prospect.
By 2025, Ethiopia is expected to grow 11% and generate 18m new mobile subscribers, according to a recent report by telecom trade body GSMA (Global System for Mobile Communications).
The executive indicated that Ethiopia’s plans could also give Orange a valid reason to consider launching an IPO of its OMEA division.
However, a “clear” strategic growth project for Africa will need to be defined before such a launch.
- “We don’t want the IPO to be interpreted as Orange making a move to pull out of Africa, as was the case with Bharti Airtel and Telefonica. This means that we’ll also base our IPO decision on the markets and OMEA’s valuation,” Richard said.
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