No fourth operator to be licensed in Ethiopia until at least 2030

3 Dec 2020

There will be no fourth operator licensed in the Ethiopian telecoms market for at least ten years following the initial introduction of competition, Addis Fortune reports, citing comments made by Brook Taye, a senior advisor at the country’s Ministry of Finance (MoF). With a tender for two new licensees having officially gotten underway last week, the winning bidders will each receive 15-year concessions. According to Taye, the current plans are for a ‘two plus one approach’ to be followed once the market is opened up, and he noted that during earlier consultation meetings regarding the country’s liberalisation plans, prospective bidders had requested between three to five years before any further entrants were permitted. However, it would appear a longer period is being envisaged by the authorities, with Taye noting that a market dynamics study conducted by the MoF and the Ethiopian Communications Authority (ECA) had concluded that the market could work with three operators for a decade, with the advisor saying: ‘With fair and equitable profit the market can absorb three companies for ten years.’

Meanwhile, in return for the grace period it was noted that the winning bidders will be subject to coverage requirements, with these including reaching 98% of the population with voice and text message services within five years. Failing to achieve these coverage targets will, Brook said, ‘result in a sanction’.

As previously reported by CommsUpdate, a request for proposals (RFP) for the award of two new telecoms licences was launched by the ECA last week, with interested parties given until 10 December to submit a request for the documentation and state their intent to take part in the bidding process. Following this, 25 December has reportedly been set as a deadline for the receipt of questions and suggestions regarding the RFP from would-be bidders, with the MoF and ECA expected to respond to those in January 2021. A final version of the RFP, which will incorporate comments from the bidders, will then be released 29 January, with a final bid submission date of 5 March having been set.

According to Brook, meanwhile, with the way in which the bid document outlines the technical and financial requirements said to be very objective and easy to measure, he said the bid evaluation team aims to complete the selection process and announce the winners less than a month after the closing date. ‘We expected to announce the winners in March,’ the advisor added.

Ethiopia, Estonian Competition Authority (ECA)