Telecom

Ethiopia Plans To Sell Stakes Of National Telcom

The government of Ethiopia's has announced its decision to open up its telecoms market to international investors.

The country's Prime Minister, Abiy Ahmed who made this announcement said that 5 percent of the equity in each company would be opened to investors in the North-Eastern nation while up to 40 percent of the share would be offered to giant international telecom operators that would like to play a role in the country's communications sector.

The national state-owned operator EthioTelecom says it will sell these shares slowly by splitting it the organisation into two companies and then selling incremental stakes in the two operations during the coming years.

EthioTelecom boasts of about 60 million customers, of which about 58 million are mobile customers. This indicates a room for growth in a country with a recorded population of approximately 100 million as well as a growing economy.

Giant network provider MTN and Vodacom have both expressed interest in investing in Ethiopia's telecom industry.

For years Ethio Telecom’s monopolistic control stifled innovation, restricted network expansion and limited the scope of services in the country. Despite several efforts to take the privatisation route to and introduce competition, the government rejected all efforts along these lines.

Although there seem to be a considerable investment in telecoms services to the tune of  $3.1 Billion, the sector is heavily regulated with the government wielding complete control over networks, with virtually unlimited access to the call records of all phone users and to logs of internet traffic.

 Despite efforts made to improve the reach and capabilities of mobile networks, Ethiopia's mobile penetration ranks among the lowest in the world.

The Ethiopian government is making this move as part of a broader program that is designed to improve the economy, introduce competition and attract international investment.

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