Ethiopia’s Ministry of Finance has issued a statement announcing its decision to defer the partial privatisation of the country’s monopoly telecoms provider, Ethio Telecom. The causes mentioned for the postponement include the recent macroeconomic changes globally as well as domestically in Ethiopia.
In its bid to partially privatize the state-owned Ethio Telecom, the Ethiopian government had proposed to sell 40 percent of the company’s equity as part of its larger plan to open up its economy. The government launched a tendering process in June 2021. It also issued a Request for Proposal (RFP) and held several rounds of discussions with bidders. Over and above the 40% equity, another five percent of equity was to be offered to the general public.
The Government however reiterated its commitment to the privatization and indicated that it will re-engage with the existing and additional bidders that have expressed interest in the RFP. According to the Government, a better macroeconomic situation as well as improved financial performance of Ethio Telecom will lead to better value for all the parties involved.
Parts of its network has been crippled by military conflict in the north of the country but posted a 6.7% rise in revenues to 28 billion birr ($550.09 million) in its half year to Dec. 31. In December, the industry regulator Ethiopian Communication Authority (EC), announced temporary suspension of a tender process for a second telecommunications licence .It sold only one of two full-service licences on offer in May to a consortium led by Kenya’s Safaricom Vodafone, and Japan’s Sumitomo. The consortium is in the process of setting up its network ahead of a planned commercial launch next month.
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