Safaricom seeks partners for billion-dollar Ethiopia entry

21 February 2020

Mergers, Acquisitions and Financial Results

Safaricom has opened talks with undisclosed investors to form a consortium that will this year bid for one of two Ethiopian telecoms licences due to the high entry costs that are likely to breach the Ksh100 billion ($1 billion) mark.

The Nairobi Securities Exchange-listed firm said it was racing to assemble the group of investors ahead of its Ethiopia bid, which is expected in April.

Safaricom had last year talked of a joint bid in partnership with South Africa’s Vodacom, which owns a 35 percent stake in the firm. However, sources at the company said that more firms could be involved in the consortium angling for a market that has attracted the interest of global telecommunication firms, including Vodafone, which owns five percent of Safaricom.

“We have not made any decisions (source of funding) yet as the constitution of the consortium has not been finalised,” acting Safaricom CEO Michael Joseph told the Business Daily in an interview on Monday. “It’s a consortium because it’s a big investment. I cannot provide names”.

Mr Joseph had earlier said that it would require a "billion-dollar range" for licence fees and network expenses.

Ethiopia plans to award permits later this year, opening the country’s telecoms market to foreign investment for the first time.

Source The East African