Ethiopia to open telecom for three operators

The Government of Ethiopia, which has been on the process of privatizing telecom and opening the sector for competition, has said there will be only three competing telecom operators in the country.

Briefing reporters this afternoon, Dr. Eyob Tekalign, State Minister of Finance, indicated that in addition to Ethio Telcom, which is set to sell 49 percent of its stake for foreign operator (s), two additional foreign telecom operators will only be granted license.

Ethio telecom will be one company with two wings – service provider and infrastructure developer. A foreign company which buys 49 percent can benefit from both wings of Ethio Telecom, as the company remains one.

Infrastructure investment on telecom infrastructures is open for foreign telecom companies, according to Dr. Eyob , who stated that the sector requires huge investment amounting $2.2 billion in order to leapfrog the country into digital economy.

“…In order to make the country a startup nation communication infrastructure plays key role…If we take for instance 4G is limited to Addis Ababa at the moment…Telecom is key to build digital economy…overall impact is enormous…that is why we prioritized telecom privatization and liberalization of the sector, ” he said.

Commenting on why only two more telecom operators are allowed to enter the market with over 100 million plus population, he stated that the global experience and recent trend shows merging and small number of operators with in a given market.

He stated that in the coming few months the Ministry of Finance will invite global companies to take part by issuing request for interest. We don’t know yet which company will be selected…World bank is the one consulting us…With market big like Ethiopia we expect 50 to 60 expression of interest, he said. Currently there are 40 million mobile subscribers in Ethiopia.

The Ethiopian government has decided to end its monopoly on several sectors about a year ago deciding to partially or full liberalize major businesses such as telecom, logistics, sugar, power, industry parks and Ethiopian Airlines.

The main reason for the decision is because government only financing model didn’t succeed in making the sectors efficient, according to Dr. Eyob. Commenting on the opportunities for the local people to invest in these sectors, he indicated that the public can invest in these companies after the companies are listed on stock market in the future.