Stakes just got higher for Ethio Telecom
Ethiopia’s government has increased the amount of its planned partial privatisation of incumbent operator Ethio Telecom to 45%, up from the previously announced amount of 40%.
In November last year, the Ethiopian government announced the revival of the privatisation process of Ethio Telecom saying it would sale a 40% stake in the company in order to make it more viable and competitive.
The Ministry of Finance has now released a statement confirming the stake has been revised.
According to the official Request for Proposals, the government is considering partners who can bring in best practices in terms of operations, infrastructure management and next-generation technological capabilities.
It said Ethio Telecom’s robust infrastructure coupled with the strong financial performance will offer significant competitive advantage to any investor and that the low tele-density in the country highlights the potential that exists within the country’s telecommunications industry.
The statement said, “The government of Ethiopia has laid out the framework for the privatisation of public enterprises in order to broaden the role of private sector in the Ethiopian economy, improve the efficiency of public enterprises, enhance their competitiveness, increase their access to capital and enhance the quality and accessibility of their services.”
The partial privatisation of Ethio Telecom is part of the broad economic reforms initiated in 2019 by Prime Minister Abiy Ahmed to open the country up to private investment.
Ethio Telecom is currently facing competition from Safaricom Ethiopia, a consortium which includes the British Development Finance Corporation Agency (CDC) Group and Japanese Sumitomo Corporation, which entered the Ethiopian market in 2021 after securing a US$850-million licence to operate.