An MTN stand at an expo. PHOTO | FILE | NMG After losing out to the Safaricom-led consortium in the race for a telecom licence in Ethiopia in May, MTN now says it will not make a second bid to expand into the region via the reissued licence that comes with mobile money.
Sources said an escalation of the Tigray conflict could trigger full-scale US sanctions against Ethiopia, as was the case with Iran, where MTN operates and is poised to exit.
In Ethiopia, the telecom giant is wary of bidding for the licence and then sink millions of dollars in telecom infrastructure that carries a risk of being damaged.
After losing out to the Safaricom-led consortium in the race for a telecom licence in Ethiopia in May, MTN now says it will not make a second bid to expand into the region via the reissued licence that comes with mobile money.
The telecom giant is cautious about the investment risk that Ethiopia currently poses, which company executives say outweighs the benefits.
“Our April bid for a new telecom licence in Ethiopia was unsuccessful. Our bid took into account the licence conditions as well as related uncertainties. We had also adopted a partnership approach to ensure that funding and risk was diversified. While disappointing, we are comfortable that our approach was guided by disciplined strategic and capital allocation frameworks,” MTN said while announcing its results last week on Thursday.
“We thank the Ethiopian government for the opportunity to have been part of the previous process. We also thank the partners we had in our unsuccessful licence bid,” the telco said.
The ongoing conflict in the north of the country, which saw the US in May slap visa restrictions on government officials, as well as tensions between Ethiopia and its Nile Basin partner states Sudan and Egypt over the filling of the giant Renaissance dam are top of the risk factors that make the deal unfavourable.
Sources said an escalation of the Tigray conflict could trigger full-scale US sanctions against Ethiopia, as was the case with Iran, where MTN operates and is poised to exit.
According to US Secretary of State Antony Blinken, the punitive measures target current and former government officials, members of the security forces, and members of the Tigray People’s Liberation Front (TPLF). He also announced cuts in economic and security aid to Ethiopia.
Rating companies Fitch Solutions and Coface have flagged these factors […]
