Ethiopia’s telecommunications regulator granted a single operating license to a consortium led by Safaricom of Kenya, Sumitomo Japan, and CDC Group of the United Kingdom.
“Today, the Council of Ministers unanimously made a historic decision authorizing the Ethiopian Communications Authority to award a new nationwide telecom license to the Global Partnership for Ethiopia, which offered the highest licensing fee and a very strong investment case,” Prime Minister Abiy Ahmed said on Twitter.
In the global alliance for Ethiopia consortium, East Africa’s mobile telecommunications giant Safaricom holds 56 percent, Japan’s Sumitomo 25%, CDC 10%, Vodacom 6%, and the rest is held by the UK sovereign investment fund.
According to Brook Taye, a senior advisor at Ethiopia’s finance ministry, the Consortium paid $850 million for the license, beating out MTN of South Africa, which had also bid for the license with a bid of US$600 million.
The sum bid by Safaricom and MTN Group, on the other hand, is expected to be made public soon.
Over the next decade, the Safaricom consortia are projected to spend more than $8 billion, according to the PM. “With a total investment of over $8 billion, this will be the single largest FDI into Ethiopia to date,” the Prime Minister said, adding that the process was competitive and transparent.
After nine other companies dropped out of the bidding phase, Safaricom’s chances of securing one of the licenses skyrocketed.
Orange, Etisalat, Telkom SA, Snail Mobile, Axian, Liquid Telecom, Electromecha International Projects, and Kandu Global Communications are among the companies that have dropped out of the bidding process.