Ethiopia will split state-run monopoly Ethio Telecom in two and gradually sell shares in both entities to top telecoms companies in a bid to increase competition, Prime Minister Abiy Ahmed stated.
During a question and answer session in parliament, he said: “Somalia, with a population of 12 million, has four telecommunications firms. Ethiopia, with 100 million people, has one. There needs to be competition in the country,” Reuters reported.
Under the plan, a total stake of between 30 per cent to 40 per cent in Ethio Telecom will be sold to operators, provided they are rated as top ten players globally.
In a separate, related, report from Bloomberg, Ahmed revealed Ethiopians will be offered 5 per cent of the new companies.
Earlier this month it was reported Ethiopia, which for many years had a heavily government-controlled economy, was going to open up its telecoms monopoly and other assets to investors.
This was followed by an expression of interest by South African-based Vodacom and MTN in having an Ethiopian presence.
MTN said the Ethiopian market “would be a natural fit” for its current operations on the continent, while Vodacom said Ethiopia is “an attractive market, so it follows that there would be interest”.
However, the process will be a slow one. The Prime Minister said up to two years of “intensive study” will be undertaken before shares are sold gradually over a period of up to 30 years.
“We are not giving it up in one go, it is not possible,” Bloomberg reported the prime minister as stating.