Kenya: Safaricom In Joint Licence Bid For Ethiopian Entry

29 November 2019

Telecoms

Safaricom has reportedly been forced into a joint bid for one of two Ethiopian telecommunications licences early next year due to the high entry fees that are expected to exceed the $984 million mark.

The telecoms firm said that it would bid in partnership with South Africa’s Vodacom, which holds a 35 percent stake in Safaricom.

The acting CEO at Safaricom, Michael Joseph, said that the high entry fees had prompted the joint bid as it aims to replicate its Kenyan success in Ethiopia.

Last month the Ethiopian government said that it plans to grant the permits by April next year, opening the country’s telecoms sector to foreign investment for the first time ever.

Ethio Telecom, the state monopoly telco, has also announced that is taking steps towards offering a minority stake to a new strategic investor.

Mr Joseph said that Safaricom is currently considering all the options available.

For Safaricom, an acquisition would be an easier solution than setting up its own shop, which would include buying land, hiring staff, obtaining subscribers and growing market share from scratch against a dominant player like Ethio Telecom.

Safaricom, as well as other global telecoms firms including Orange, MTN, Zain and Etisalat, have all expressed interest in joining Ethiopia’s fast-growing mobile industry.

Leading players such as Safaricom are attracted by the growth potential in Ethiopia’s market, whose 100 million population offers the country a penetration rate of 44 percent.

Addis Ababa plans to issue the two new telecoms licences as well as the sale of Ethio Telecom as part of a singular, synchronised process.

Source: All Africa www.allafrica.com