MTN justifies low bid for Ethiopia’s telecoms licence
MTN has justified its low bid for Ethiopia’s telecommunications licence, citing the absence of mobile money opportunity in the agreement and the operator’s capital allocation framework.
In May 2021, ITWeb Africa reported that a consortium incorporating Vodafone, Vodacom and Safaricom emerged as the winner of the auctioned licence after reportedly bidding US$850-million for the licence.
MTN is understood to have bid US$600-million.
According to Ralph Mupita, MTN Group President and CEO, the decision was based on the Group’s capital allocation framework and the obstacles it identified regarding the conditions of the operating licence.
These factors trumped the opportunity despite its strategic value to the company.
Mupita also emphasised the absence of mobile money in the licensing agreement in addition to the intricacies of service integration in Ethiopia.
“We have focused particularly on the absence of Mobile Money in the licensing regime, and there were issues regarding how the telecommunications structures would be integrated in Ethiopia. We certainly assessed these things and the short-term risks that we saw, and we felt the financial offer was appropriate,” said Mupita.
According to the official list of qualified bidders that was released by the regulator in April for the first telecoms licence, Only two bidders qualified - the Global Partnership for Ethiopia (Vodafone, Vodacom, Safaricom, Sumitomo and CDC Group) and MTN International (Mauritius) Limited.
Mupita added that the operator is not ruling out the possibility of bidding for the second telecommunications licence for the Ethiopian market.