Home East Africa Safaricom won the tender for running Ethiopian telecom

Safaricom won the tender for running Ethiopian telecom

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( 4 minutes read)

·        The Ethiopian government has announced recently that Safaricom   has been awarded a telecommunications license to operate in Ethiopia

·        The Kenyan telecom major beat other consortia in the last stretch of a yearlong race for access to one of the world’s last telecoms frontiers

·        The Safaricom consortium is likely to invest over US$8billion (Sh864 billion) over the next decade.

·        This will be the single largest FDI into Ethiopia till date, said the Prime Minister noting that the process was competitive and above board

The Ethiopian government has announced recently that Safaricom has been awarded a telecommunications license to operate in Ethiopia. The Kenyan telecom major beat other consortia in the last stretch of a yearlong race for access to one of the world’s last telecoms frontiers.

The announcement was made by Ethiopian Prime Minister Abiy Ahmed. He said the Safaricom-led consortium that includes its parent firms Vodafone and Vodacom, British development finance agency CDC Group and Japan’s Sumi  bid was for US$850 million (Sh91.8 billion).

Ethiopian Communications Authority granted the license to the party offering the highest licensing fee and having a very solid investment base. The Safaricom consortia is likely to invest over US$8billion (Sh864 billion) over the next decade. This will be the single largest FDI into Ethiopia till date, said the Prime Minister noting that the process was competitive and above board.

Earlier, the Authority (Ethiopian Communication Authority) had listed 12 firms including Safaricom as a potential investor. Ethiopia’s nascent telecommunications sector is considered one of the most lucrative in the economy as the  country is opening to foreign investment for the first time. Ethiopia, with its 100 million population, the East African country offers a penetration rate of 44 per cent.

The Safaricom consortium will now likely rely on funding from deep-pocketed foreign investors, such as the US International Development Finance Corporation (DFC) and CDC riding on the back of the size and international nature of the Ethiopia investment.

South Africa’s Vodacom and United Kingdom’s Vodafone own a combined 40 per cent stake in Safaricom. Ethiopia had earlier this month made a U-turn and allowed foreign telecommunications companies to launch mobile phone-based financial services, setting the stage for Safaricom to introduce its popular M-Pesa in the market of 110 million people.

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