Ethiopia to re-open bidding on second operator licence

Ethiopia will reopen bidding for its second telecoms operator licence this month, two senior government officials said on Monday, including the right to operate mobile financial services.

“We have made some changes that can uplift its value, for instance mobile financial service,” Balcha Reba, director general of the Ethiopian Communication Authority.

The International Finance Corporation, the private sector arm of the World Bank, will serve as transaction adviser in the deal, said Brook Taye, a senior adviser at the ministry of finance.

In addition, the government expects prospective bidders to include firms which had expressed interest in the previous attempt to sell the licence but whose bids were deemed to be insufficient, Brook said.

“We expect to have a strong interest,” he said.

The Horn-of-Africa nation sold only one of two full-service licences on offer in May, citing a lower-than-expected price for the second one, which it now wants to offer again.

Mobile financial services have become a significant part of African telecom operators’ businesses since Safaricom pioneered them with M-Pesa in 2007, giving people an alternative to banks.

State monopoly Ethio Telecom, which launched a new mobile financial service called Telebirr in May, snagged 4 million users within weeks, showing the potential of the market.

A separate sale of a 40 percent stake in Ethio is going on, part of a drive to liberalise the sector and also open up the broader economy.

The economic reforms were initiated by Prime Minister Abiy Ahmed, whose troops are engaged in fighting with local forces in the northern region of Tigray, when he came to power in 2018.

This step follows an earlier public sale in Might that resulted within the sale of a single license, to a consortium led by Safaricom, for $ 850 million. The potential sale of a second license is important because it consists of the precise to market cell monetary companies, which have already confirmed very fashionable in Africa.