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Ethiopia: telco rivals agree to tower power share deal

By , Sub Saharan Africa Business, Tech, News and Development Journalist
Ethiopia , 19 Apr 2022

Safaricom, which is readying up a new network in Ethiopia, will share mobile telecommunication towers and relevant power with state-controlled rival Ethio Telecom, after the companies reached consensus on interconnection and capacity lease agreements.

The Ethiopia Communications Authority (ECA) held a joint mediation meeting with both parties and reported that “agreement had been reached on all pending issues” such as sharing of tower infrastructure.

The regulator stated: "The ongoing negotiations on tower and power sharing, transmission capacity lease and interconnection between Ethio Telecom and Safaricom Telecommunications Ethiopia Plc has been concluded in good faith.”

Ethio Telecom said it had “conducted a productive meeting with Safaricom Ethiopia” and adding that “the two companies will sign the agreements” soon.

Ethiopia, under Prime Minister Abbey Ahmed is prioritising privatisation of the telecommunications industry through licensing of new players such as Safaricom and partial privatisation of state-controlled operators.

The East African country is keen to issue a second private operator license, but has delayed the process due to concern over social unrest and volatility in the country’s Tigray region, which is understood to be of growing concern to international investors.

Safaricom Ethiopia is backed by a consortium that includes regional and international telecommunication groups Vodacom and Vodafone.

The venture said it is aware of apprehension among some investors regarding the security situation in the Tigray region but remains resolute in its business operations and objectives, and described the negotiations and agreements reached on sharing infrastructure as an “important milestone for Digital Ethiopia”.

Together with its “investment and deploying of Safaricom Ethiopia’s network” the agreements with Ethio Telecom “will be important foundations for our commercial launch” this year.

It is anticipated that Safaricom will also lean on its experience in Kenya to roll-out mobile money operations in Ethiopia, whose digital payments sector has been described by some industry executives as poorly developed.

The timing is apt given the renewed focus in several markets in Africa on enforced infrastructure sharing to expand network coverage to poorly serviced areas, and on companies that specialise in cell phone tower management being contracted to service and manage base stations for other operators.

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