Ethiopia opens up for Safaricom
The government of Ethiopia has announced it will sell its 40% stake in Ethio Telecom, which could heighten interest from international operators, including Safaricom.
According to the Ethiopian Communications Authority (ECA) both Safaricom and Vodacom have expressed interest in jointly acquiring the stake.
Safaricom had expressed an interest in the region when recently appointed CEO, Peter Ndegwa took over from Michael Joseph.
The telco had been waiting on the East African country to initiate the privatisation process of the telecommunications company, as well as the sale of two new telecoms licences before committing to officially enter the market.
On 21 May 2020 the ECA announced the sale of the licenses, saying that it was for the good of the country’s economy.
A statement issued by the regulator reads: “The issuance of the two new licenses to telecommunications companies, in addition to the existing license held by Ethio Telecom, is part of the Government of Ethiopia’s Homegrown Economic Reform Agenda to introduce competition into the sector.”
Ethio Telecom is acknowledged to be stable and reporting profits, while Safaricom has also reported profits, attributed to the growth of the M-Pesa platform.
In 2019 Ethio Telecom reported 36.3 billion birr, equivalent to US$1.1-billion, and 24.5-billion birr in gross profit, along with a national client base of over 43.6 million.
This year, Safaricom reported a net profit of Sh74.7-billion (US$697.3-million) for the year ended March 2020, which was up by 19.5% from the previous year.
Companies interested in the stake have until 22 June 2020 to officially engage with the ECA.
“Interested parties are hereby invited to submit an Expression of Interest (EOI) no later than 12 p.m. East Africa Time (GMT+3), on 22nd June 2020”, the regulator stated.