Ethiopia set to relaunch tender for second new licence?

3 Aug 2021

Ethiopia is reportedly set to reopen bidding for the country’s second new telecoms operator licence this month, according to Reuters, which cites two senior government officials as confirming the plan. Notably, the report indicates that the licence that will be put up for grabs will allow for the provision of mobile financial services, with a view to both making it more attractive to would-be bidders and increasing the price. Indeed, Balcha Reba, director general of the Ethiopian Communication Authority, was cited as saying of the plans for the retender: ‘We have made some changes that can uplift its value, for instance mobile financial service.’

It is understood that the International Finance Corporation, the private sector arm of the World Bank, will serve as transaction adviser in the deal, and the Ethiopian government reportedly expects prospective bidders to include firms which had expressed interest in the previous attempt to sell the licence, but whose bids were deemed to be insufficient. Brook Taye, a senior adviser at Ethiopia’s Ministry of Finance, said that the state expects ‘strong interest’ in the retendered licence, while suggesting that the winning bid from the initial tender – which saw a Safaricom-led consortium agree to pay USD850 million for its concession in May 2021 – could serve as a guide for the price that will be achieved in this second sale process. ‘At least there is a benchmark and to uplift this benchmark we are working on amending the policy,’ Brook noted, again hinting at the expectation that the inclusion of a right to offer mobile financial services will help drive the cost of the concession higher than in the initial licence sale.