Ethiopia Plans to Award Telecommunication Licenses to Operators

Prime Minister Abiy Ahmed has announced plans to sell minority stakes in Ethio Telkom and award telecommunication licenses to two new operators in the first quarter of 2020. This plan supports the agenda to liberalize the Ethiopian economy and attract more foreign investments.

Before this confirmatory statement, some of the biggest wireless carriers in Africa had expressed interest in doing business in Ethiopia. These include the likes of MTN Group, Vodacom, Etisalat, and France’s Orange telecommunication companies. They want to bid for a stake in the government-owned Ethio Telecom which is the most widely used telco in Ethiopia.

Ethiopia is Africa’s second most populous nation and one of the fastest growing economies with a population of over 100 million people. The economy of Ethiopia is mixed and transitional, with a large public sector. The Ethiopian government is now giving room for privatization in the telecommunication and other sectors that were once state-owned.

The privatization of the telecom will lead to increased competition, job creation and digital inclusion for people in underserved communities. It will also attract foreign investors to the country. The ministry has confirmed that the privatization will be done through a competitive bidding process.

The government plans to divide Ethio Telecom into infrastructure and service divisions. The infrastructure division will comprise of the management of fiber-optic networks and connectivity while the service division will focus on cellular and retail operations. A law has been enacted to cater for the regulation of these reforms in the telecommunication sector.