IN a significant development, the Ethiopian government has formally terminated the process of issuing a third telecom licence, pointing to a distinct lack of market interest. Senior adviser Hinjat Shamil, overseeing the bidding process, shared insights into the decision, stating, ‘We had not launched a request for bids yet because we wanted to assess market potential and readiness.’ Shamil added, ‘The market interest didn’t match ours for now to launch the RFP [Request for Proposals].’
This decision comes in the wake of reports from Bloomberg last week, highlighting low interest in the third telecom licence, primarily driven by concerns surrounding political instability in Ethiopia. The challenges posed by the country’s current socio-political landscape have evidently deterred potential bidders.
The government had initially taken steps to liberalise the telecom market, launching a request for qualification earlier this year with a September 15 deadline for interested parties. However, the response fell short of expectations, prompting the abrupt discontinuation of the process.
Ethiopia, boasting a substantial population of 120 million, was perceived as a promising yet untapped market for international companies. Opening its doors to overseas investment in 2018, the country witnessed the entry of Safaricom Ethiopia as a key player challenging the dominance of the state-owned operator, Ethio Telecom.
In a bid to bolster Ethio Telecom’s competitiveness against new market entrants, the government is actively exploring the sale of up to a 45 percent stake. The proceeds from this stake sale are earmarked for funding essential upgrades and expansions within the company.
The decision to halt the issuance of the third telecom license signifies a setback in Ethiopia’s aspirations to fully liberalise its telecom sector. The interplay of market dynamics and ongoing socio-political challenges underscores the complexities involved in navigating the country’s telecom landscape.
