Safaricom headquarters on Nairobi’s Waiyaki Way. PHOTO | DIANA NGILA Safaricom #ticker:SCOM has been awarded a telecommunications licence to operate in Ethiopia — one of the world’s last major closed telecoms markets, the Ethiopian government announced on Saturday.
Safaricom beat other consortia in the last stretch of a year long race for access to one of the world’s last telecoms frontiers.
Ethiopian Prime Minister Abiy Ahmed said the Safaricom led consortium that includes its parent firms Vodafone and Vodacom, British development finance agency CDC Group and Japan’s Sumitomo Corporation won the award after submitting a financial bid of $850 million (Sh91.8 billion).
"The Council of Ministers has unanimously made a historic decision today allowing Ethiopian Communications Authority to grant a new nationwide telecom license to the Global Partnership for Ethiopia which offered the highest licensing fee and a very solid investment case," Prime Minister Abiy Ahmed said through his Twitter handle on Saturday.
The Safaricom consortia is expected to invest over $8billion (Sh864 billion) over the next decade, he added.
"With over $8 billion total investment, this will be the single largest FDI into Ethiopia to date, said the Prime Minister noting that the process was competitive and above board.
"Our desire to take Ethiopia fully digital is on track. I would like to thank all that have taken part in this and for pulling off a very transparent and effective process," he said.
The Ethiopian Communications Authority had earlier listed 12 firms including Safaricom last November as among firms that had expressed interest in entering the country’s telecommunications market.
ECA director general Balcha Reba said in a statement Friday the award marked a new era in the country’s telecommunications development which would benefit all Ethiopians.
Ethiopia’s nascent telecommunications sector is considered one of the most lucrative in the economy as the once inward-looking country opens up to foreign investment for the first time.
Players like Safaricom are attracted by the growth potential in the Ethiopian market, whose 100 million population offers a penetration rate of 44 per cent.The Safaricom consortium, will likely now rely on funding from deep-pocketed foreign investors such as the US International Development Finance Corporation (DFC) and CDC given the size and international nature of the Ethiopia investment.South Africa’s Vodacom and United Kingdom’s Vodafone own a combined 40 per cent stake in Safaricom.Ethiopia had earlier this month made a U-turn and allowed foreign telecommunications companies to launch mobile phone-based financial services, setting the stage for […]