Djibouti Télécom leads the way in privatising national champions

By Olivier Caslin

Posted on Tuesday, 22 November 2022 16:59
On Djibouti Télécom’s premises during 4G installation, in 2018. © Patrick Robert

Still in a monopoly situation, the historical operator - Djibouti Télécom - is preparing to open up its capital. This trial run could soon impact the Djibouti public sector’s other champions.

The plans to privatise Djibouti Telecom are in the final stages. ”The process is underway, for a decision that should be implemented before the end of the year,” said Ilyas Moussa Dawaleh, the minister of economy and finance.

The operation involves 40% of the planned capital, “but we are not dogmatic”, says the country’s big money man, implying that the state could sell more. “The objective is to find a strategic partner [who] is ready to bring all its expertise to ensure Djibouti’s digital transformation.”

This beautiful bride has no shortage of suitors. The single operator rakes in a hundred million dollars in profits every year on a market that is admittedly limited but captive. Djibouti has a dozen submarine cables at its doorstep (soon to be 15, according to the authorities) that connect the country, the Horn and Africa to the rest of the world. “Exceptional infrastructures on which the time has come to capitalise,” says Dawaleh.

Interconnections and related activities

Djibouti Telecom connects the Ethiopian, Somali and Yemeni networks to other continents and wants to do the same for Kenya and the Great Lakes region.

In order to eventually play the role of ‘digital hub’ that they are aiming for, Djibouti and its operator wish to develop related activities at the same time, particularly in data storage.

The country has been home to the Djibouti Data Center (DDC), located a few dozen metres from the international cable landing station, which is managed by Djibouti Télécom, since 2013. Two other similar projects are expected soon. The first will be in the capital and the second in Obock, in the northern part of the country. The project that was presented in 2019 by the French company Telsam (which is associated with Djibouti Télécom and Électricité de Djibouti -EDD), seems to have survived the Covid-19 pandemic.

A second licence “as early as 2025”

By opening up this capital, a move that was authorised through a December 2021 law, the Djiboutian state hopes that one of the only flagships, just like its ports, will be able to radiate internationally.

Injecting new financial resources will enable the operator to upgrade its infrastructure. It will also enable Djibouti Télécom to confront emerging competitors in the telecommunications market – both in the Horn of Africa and its own country – since the government intends to grant a second licence “as early as 2025”.

It will then be time to draw the first lessons from the current operation and measure its effects “for the country, consumers and the operator”, says Dawaleh.

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