Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.


MTN, Vodacom consortium only bidders for Ethiopian license

Article Image
The Ethiopian Communications Authority (ECA) has received just two offers for new telecoms licenses in the country, after the market initially expected a lot more interest.

The ECA confirmed that on April 26, 2021, it had received both technical and financial offers from pan-African operator MTN, and a consortium made up of Vodafone, Vodacom and Safaricom.

"It is very surprising that out of the 12 companies that previously expressed interest in the bid, only two managed to submit their proposals," Danson Njue, Omdia senior research analyst for Africa, told Connecting Africa.

In June 2018, the Ethiopian government announced it would open up the telecoms sector in the country and award two new 15-year licenses and sell a 45% stake in state-owned Ethio Telecom.

Since then, the process has had some delays but on Monday the ECA said it had officially closed the application process for the two new licenses after receiving the two bids that met its "strict technical qualification criteria."

MTN Group confirmed in a statement that it had made a bid in partnership with Silk Road Fund from China. It said other partners will be disclosed on a successful bid outcome.

The Vodacom consortium, named The Global Partnership for Ethiopia, also includes Japan's Sumitomo Corporation and CDC, the UK's development finance institution.

"I think most of the telcos that backed off from the bid process are hoping to acquire the 45% stake that the government plans to divest in Ethio Telecom," Njue said.

Major interest

The ECA said last June that it had received 11 complete submissions of interest in the two new telecoms licenses up for grabs, and one incomplete submission.

At the time, nine operators threw their hats in the ring, including Etisalat, Axian, Orange, Saudi Telecom Company, Telkom SA, Liquid Telecom and Snail Mobile.

With a population of over 110 million, the Horn of Africa nation's telecoms industry is regarded as a massive growth opportunity because up until now it has been one of the last nations with a complete telecoms monopoly.

The growth opportunity is also huge, with less than 40% of Ethiopia's population using a mobile phone and only about 20% accessing the Internet, according to a recent report from DataReportal.

However, political and economic uncertainty and ongoing conflict in the northern Tigray region could be scaring investors away.

Njue said that delays in the process may have affected investment plans for some multinational companies, as well as new regulations last year that would stop foreign telecoms tower operators from building new infrastructure in the country.

"This would require the new licensees to deploy their own network infrastructure, which would mean that the successful operators would need to invest quite a tidy amount of money to meet the network coverage obligations outlined by the regulator," he said.

Njue said that the license fee is also expected to be high, based on Safaricom's projections in 2019 that it would cost about $1 billion for a new license.

"In addition, the government announced that the new licensees would not be allowed to provide some services such as the mobile financial services. The Ethiopia market provides a niche market for financial services due to relatively low financial inclusion and denying new operators an opportunity to provide the services may discourage some companies," he added.

The ECA previously said it expects that the new operators will be awarded their licenses in the second quarter of 2021.

Related posts:

— Paula Gilbert, Editor, Connecting Africa

Innovation hub


Hot startup of the month: Pan-African fintech KamaPay

This month's hot startup is pan-African fintech KamaPay, which helps individuals and businesses make cross-border payments on the continent.


Afretec awards $3.3M in grants to African research teams

The African Engineering and Technology Network (Afretec) has awarded grants worth $300,000 each to 11 university research teams across Africa to advance digital technologies.

More Innovation hub

Latest video

More videos

Sponsored video

More videos

Industry announcements

More Industry announcements

Flash poll

All polls

Africa Tech Perspectives


Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.


Challenges and opportunities for women's tech careers

A new survey reveals that COVID-19, the cost-of-living crisis, skills shortages and a lack of mentorship have negatively affected women's career development over the past two years.


Survey: Opportunities for Women in Tech

Take our new survey for women across Asia, Europe and Africa looking at the biggest challenges and opportunities for women-led enterprises and trends in tech careers for women.

More AfricaCom perspectives

Upcoming events

London Tech Week
June 13-16, 2023
Queen Elizabeth II Centre, Broad Sanctuary, London SW1P 3EE
Cybertech Africa 2023
August 1-2, 2023
Kigali Convention Center, Kigali, Rwanda
Africa Tech Festival, Home of AfricaCom and AfricaTech
November 13-16, 2023
CTICC, Cape Town
More Upcoming events

Guest Perspectives


Omdia View: February 2023

By Omdia Analysts

In February 2023 key events in the Middle East and Africa included a major Internet project for Africa's underserved by Liquid Intelligent Technologies and Microsoft as well as a 5G launch in Tanzania – that and more in this month's Omdia View.


Omdia View: July 2022

By Omdia Analysts

Kenya and Zambia move towards 5G with new spectrum allocations while Tunisie Telecom plans to shut down its 3G network - that and more in this month's Omdia View.

More Guest Perspectives

Partner perspectives

All Partner Perspectives

Like us on Facebook

Newsletter Sign Up

Sign Up