Ethiopian PM outlines plans to split Ethio Telecom in two, sell shares in both companies

19 Jun 2018

Ethiopia’s government is planning to break state-run monopoly provider Ethio Telecom in two and then sell a 30%-40% stake in both of the companies created by this move, with a view to spurring competition in the local telecoms sector. According to Reuters, the plan was outlined by Prime Minister Abiy Ahmed yesterday (18 June) during a question and answer session in parliament, where he noted: ‘There will be two telecom corporations and shares will be sold in both … Somalia, with a population of twelve million, has four telecommunications firms. Ethiopia – with 100 million people – has one. There needs to be competition in the country.’ Further, the PM also specified that he wants the holdings offered in the two telcos to be sold to high-profile companies, adding: ‘The stakes in Ethio Telecom will be allocated to firms that are ranked top ten in the industry globally.’

As previously reported by CommsUpdate, earlier this month Ethiopia’s ruling EPRDF coalition confirmed its intention to open Ethio Telecom to investors, and the news saw two of Africa’s more notable telecoms groups express an interest in taking up a position in Ethiopia. South Africa’s MTN Group said it was excited by the potential opening up of the Ethiopian market, noting that it would be ‘a natural fit for [the company’s] existing pan African footprint,’ and adding: ‘Ethiopia presents many exciting telecommunication opportunities and we look forward to further discussions with that nation’s authorities on potential partnerships and opportunities.’ Meanwhile, another South Africa-based company, Vodacom Group – itself majority owned by the UK’s Vodafone Group – said of the development: ‘Vodacom has said on many occasions that Ethiopia is an attractive market so it follows that there would be interest. Naturally this is dependent on what might become available and if it fits within our investment parameters.’

Ethiopia, Ethio Telecom