Do the Right Thing: Two key African Governments make clear commitments to liberalizing their telecoms sectors

23 August 2019

Top Story

News in this week confirms that the tentative steps taken by Angola and Ethiopia to liberalize their telecoms sectors are now being turned into internationally recognized programmes of implementation. Russell Southwood looks at why things have changed.

In April this year I looked at the flawed bidding process for the fourth mobile license in Angola.

In a nutshell, the bidding process (that had included recognized African mobile operators like MTN being on the shortlist) ended up with the license being given to local unknown Telstar. And the shareholders in Telstar? 90% is held by General Manuel Joao Carneiro and 10% by businessman Antonio Cardoso Mateus. According to a Telegeography report on 27 November 2018, the General has been linked with small Angolan operator called Mundo Startel, one of Telecom Namibia’s failed international investments.

Shortly afterwards the Angolan President João Lourenço cancelled the awarding of the fourth mobile licence to a shell company with a General as its main shareholder.

Lourenco demanded higher levels of transparency in a relaunched tender for the licence, which will also include rights to offer fixed network and TV services.

This week international consultancy KPMG was selected to oversee the evaluation of bidders in a new licensing process, according to Ecofin. There is now an Inter-Ministerial working group in overall charge of the process.

KPMG Angola’s task has been described as the evaluation of applications, offers and the preparation of the tender process. It will also support the international promotion of the call for tenders, to be launched ‘soon’ according to the finance ministry.

Alongside this more transparent licensing process, the Government has announced a programme to privatize its significant telecoms holdings. These include: Unitel, Angola Telecom, MS Telecom. Angola Cables, TV Cabo Angola, National Post and Telegraph Company of Angola (ENCTA) and Company Telephone Directories of Angola (ELTA).

Government officials believe that the 45% interest that would be for sale in Angola Telecom is worth approximately US$500-million. This really will be a hard sell as even a large minority shareholding of this kind will allow Government to interfere in the running of the company.

News coming out of Ethiopia from multiple sources – both our own and a Reuters report in June – indicate that the Ethiopian Government has decided not to let the lengthy process of privatizing the country’s monopoly telco Ethio Tlecom hold up the offering of new mobile operator licenses.

The plan to offer two mobile licenses will be announced in September with awards being made in December. State Minister of Finance Eyob Tekalign Tolina told Reuters the government hoped to launch a bidding process in September, but he declined to give further details of the reform plan. “By this time next year, we hope that many Ethiopians will be using different SIM cards,” he said. “We are operating on a very aggressive timeline.”

The government will expect the winning companies to start operations next year, initially using Ethio Telecom’s infrastructure to run their networks, the sources said.

Angola and Ethiopia are both major markets and although there are still things that give cause concern – in both cases the shareholding level in the incumbent telco – these developments set a clear example to the other 36 countries that have yet to privatize their state telco.

Angola and Ethiopia are both top digital landscapes – Find out why

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