Ethiopia to split telecoms monopoly to bolster competition

Ethiopia to split telecoms monopoly to bolster competition

MTN, Vodacom have expressed interest in the growth potential of the market.

Ethiopia's Prime Minister Abiy Ahmed has confirmed plans to sell a 30% - 40% stake in its state-run telecoms monopoly and split the company into two in order to encourage competition in the market, according to Reuters.

The report suggests that by selling stakes in Ethio Telecom and other assets would open the country up to "huge potential investments by firms willing to work with a government still wary of private enterprise."

Reuters quotes Ahmed as saying: "There will be two telecom corporations and shares will be sold in both. Somalia, with a population of 12 million, has four telecommunications firms. Ethiopia - with 100 million people - has one. There needs to be competition in the country."

The agency further reports that the stakes in Ethio Telecom will be allocated to firms that are ranked top ten in the industry globally.

In early June ITWeb reported that Ethiopia's government confirmed it would allow private domestic and foreign investment in state-owned telecoms, aviation, shipping and power companies.

MTN and Vodacom have since expressed interest in Ethiopia and opportunities related to its growth potential.

An MTN spokesperson told ITWeb: "MTN has long held the view that Ethiopia offers great opportunities for growth, both for the people of Ethiopia and for the businesses that could serve them, through the liberalisation of the telecommunication market in that country."

While Vodacom issued a statement: "Vodacom has said on many occasions that Ethiopia is an attractive market so it follows that there would be interest. Naturally, this is dependent on what might become available and if it fits within our investment parameters."

In November 2017 The Shenzhen Outbound Alliance (SOA) has opened its first African branch office in Addis Ababa to make available ICT-related expertise and strengthen economic ties between Ethiopia and ultimately the rest of Africa.

At the time the Ethiopia Investment Commission (EIC) claimed Chinese companies have more than 370 projects that have either been operational or under implementation in the country over the past five years.