Auction for Ethio Telecom Shares Due in Two Months

The Ministry of finance (MoF) has finalized the initial preparations to float an international tender to privatize 40 percent of the state owned telecom giant.

Speaking to The Reporter, Minister of Finance, Ahmed Shide said that all the necessary enabling preparations have already been done in order to float 40 percent of the shares to telecom bidders.

The government will retain 55 percent of the shares, while five percent of the shares will be sold to the public. It can be recalled that ethio-telecom had hired KPMG East Africa to value its entire business assets.

Along with this partial liberalization, two weeks earlier, Ethiopia received two bids for two telecom operating licenses; a license which is believed to open up Ethiopia’s telecom industry.

Accordingly, the MTN Group Ltd. and a consortium led by Vodafone Group Plc, have bid for the licenses. Ahmed told The Reporter that the company’s bidding document is under evaluation and as soon as it gets the government’s approval, the results will be publicized.

“The government expects at least two million jobs to be created within the first ten years of the operation of the two telecom firms in the Ethiopian telecom market,” Ahmed said.

Similarly, ethio telecom will overhaul and invest further to be a competitive firm and provide efficient telecom services, Ahmed said during a USD 200 million financial loan signing ceremony with World Bank country director, Ousmane Dione on Friday.

The World Bank financial support aims to finance Ethiopia’s digital foundation projects.

Speaking at the ceremony, the World Bank Ethiopia director said that Ethiopia’s telecom sector has been held back by the lack of innovation and absence of private enterprises to compete with the state owned operator, ethio telecom. Ethiopia is one of the only three countries in the world, along with Djibouti and Eritrea, that has maintained an absolute state monopoly over telecommunication services, said the director.

He also mentioned prices are high, access is low; less than half of Ethiopians are mobile phone users and less than a quarter have internet access.

Under the USD 200million financial support, the WB will help the government strengthen the regulatory foundation of the digital economy, strengthen universal digital ID, expand digital payment platforms and financial inclusion and other government priorities.

Source: The Reporter Ethiopia