Foreign interest in Ethiopia’s telecoms markets

Foreign interest in Ethiopia’s telecoms markets

The two decades of Telecom sector monopoly lead by Ethio Telecom will be concluded. On May 21, 2020, the Ethiopian Telecommunications Authority has launched the invitation for submission of Expression of Interest (EOI) for Telecommunications Service Licenses. The deadline to submit the applications for licenses was on June 22, 2020.

The Communications Service Proclamation No. 1148/2019 has set the framework for the liberalization and development of the Ethiopian Telecom Sector. This move allows the introduction of competition among other local and international telecom operators. The Ethiopian Telecommunications Authority (ECA) said that it has received an expression of interest from 12 foreign companies including nine international telecom operators and two non-telecom companies, in a press release published on June 26, 2020. The World Bank’s International Finance Corporation has been acting as an advisor on the bidding process.

According to ECA, the bidders from the Telecom sector are Etisalat, Axian, MTN, Orange, Saudi Telecom Company, Telkom SA, Liquid Telecom, Snail Mobile, and Global Partnership for Ethiopia- an assembly of telecom operators that regroups Vodafone, Vodacom, and Safaricom. On the other hand, the non-telecom companies are Kandu Global Telecommunications and Electromecha International Projects. However, Ethiopia Communications Authority (ECA) received 1 out of 12 incomplete submissions. “This is the initial stage. We will soon have the second stage,” said ECA head Balch Reba to Reuters. The authority will access the bidders to find out the best operator for Ethiopia’s Telecom market.

Between June 1 and June 19, 2020, the ECA held public consultations on directives-Telecommunications Licensing Directive, Consumers Rights and Protection Directive, and Dispute Resolution Directives- for Stakeholder Consultation that will facilitate the issuance of telecommunications service licenses according to a news published on ECA website on June 10, 2020.

A crucial legal framework comes to support Ethiopia’s decision to liberalize the Telecom Sector. Ethiopia has ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This ratification was considered by Tameru Wondm Agegnehu- founding partner of the eponymous Addis Ababa-headquartered law firm- and- BonelliErede partner Laurence Shore- as an important development in the country’s strategy to attract foreign investments.

The ECA intents are to provide two licenses for two nationwide operators. The winners will receive a license for 15 years with a possibility of renewal. The goal of the Ethiopian Government would be ensuring accessible communications services aiming to support rapid economic growth and the digital economy.