Second Ethiopian telecoms licence is up for grabs – again

Second Ethiopian telecoms licence is up for grabs – again

The on-again-off-again story of the sale of two full-service telecoms licences in Ethiopia is  back in the news after an announcement from  the country’s government that it plans to reopen bidding for its second telecoms operator licence, which did not attract acceptable bids the first time round.

In what may be an acknowledgement that earlier restrictions lowered the value of the second licence, there have been hints that mobile financial services, formerly not permitted in the sale, will be included in the new licence offering.

Reuters quotes Brook Taye, a senior adviser at Ethiopia’s Ministry of Finance, as saying that the International Finance Corporation, the private sector arm of the World Bank, will serve as transaction adviser in the deal.

A consortium led by Kenya's Safaricom already owns one licence after an $850 million bid, but pan-African giant MTN had its bid of $600 million turned down as too low.

So will the new terms attract stronger bids? This seems likely given the clearly massive interest in mobile money in the country. The recently introduced mobile finance service Telebirr from Ethio Telecom has enjoyed a very strong response. However, the new terms also beg the question of whether the Safaricom consortium will now want a rule change to allow it to offer mobile financial services alongside the winner of the second licence.

A separate sale of a 40 percent stake in Ethio Telecom is also under way.


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