Just weeks after the Ethiopian Communications Authority (ECA) initially suspended the country’s telecoms privatisation plans, the East African country now intends to fast-track a “partial privatisation” of the sector come February 2021.
While giving an update on the proceedings in Addis Ababa last week, Ethiopia’s Minister of Finance, Eyob Tekalign, said “We have a February, January timeline for both processes. The reform is fully on track.”
Business Elites Africa understands that the Ethiopian Government initially planned to sell off as much as 40% minority stake in the state-owned telecommunications company – Ethio Telecom. However, the Government abruptly suspended all privatisation plans in August without giving any explanations as to why.
In the meantime, the East African country’s privatisation plans are now back on track. If the privatisation process is successful, it is expected to help break up the monopoly of Ethio Telecom, the country’s state-owned telecommunications company. Currently, as much as 46 million Ethiopians rely solely on Ethio Telecoms to meet their telecommunications needs.
Already, a total of twelve global and African telecoms giants such as MTN Group Ltd, Orange, Vodacom, and Safaricom have all expressed interests to bid for two mobile network operating licenses
Privation to Boost Ethiopia’s Telecoms Sector, Deepen Broadband Penetration
This is a welcome development for Ethiopia which is one of Africa’s biggest economies. The country is also one of the most populated on the African continent, with an estimated population of 115 million. Unfortunately, only about 40% of this total population is currently subscribed to a mobile network. This is too low for a country as important as Ethiopia.
Privatisation is, therefore, expected to help deepen broadband penetration whilst paving the way for auxiliary services such as mobile money which would inevitably encourage financial inclusion.
Note that other regional superpowers on the continent (such as Nigeria, South Africa, and most countries in Northern Africa) have long privatised their telecommunication industries. The advantages of these privatisation efforts are now evident in those countries.