Ethiopia preps for sale of stake in Ethio Telecom
Following several delays, the government has begun the process of selling a 40% stake in the incumbent telco Ethio Telecom to an international investor, as well as a 5% stake to local investors. This is part of a wider government strategy to open the telecom market and other economic sectors to competition, and so develop socio-economic growth through diversity while focussing on making better use of digital services and technologies.
Competition in the telecom sector has recently been enabled by licensing the GPE consortium, though services are not expected to be launched until 2022. In coming years, the mobile market in particular will be transformed through additional investment, supported by the know-how and scale of the consortium’s participants, which include Safaricom and Vodacom, as well as Vodafone Group as the chief shareholder in those companies.
The consortium will also provide an entry point for Western vendors to enter Ethiopia’s telecom market, loosening the stranglehold long held by ZTE and Huawei. With mobile penetration at only about 44%, the potential for growth is considerable. Further growth is expected to be concentrated on mobile services, though there is also room for greater wholesale access for ISPs.
