Media & Telecom

EXCLUSIVE Ethiopia to reopen bidding for second telecoms licence, officials say

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A customer holds a 3G prepaid sim card after buying the service from an Ethio-Telecom shop in Addis Ababa, Ethiopia, November 12, 2019. REUTERS/Tiksa Negeri/File Photo

ADDIS ABABA, Aug 2 (Reuters) - Ethiopia will reopen bidding for its second telecoms operator licence this month, two senior government officials said on Monday, including the right to operate mobile financial services.

The Horn-of-Africa nation sold only one of two full-service licences on offer in May, citing a lower-than-expected price for the second one, which it now wants to offer again. read more

"We have made some changes that can uplift its value, for instance mobile financial service," Balcha Reba, director general of the Ethiopian Communication Authority, told Reuters.

The International Finance Corporation, the private sector arm of the World Bank, will serve as transaction adviser in the deal, said Brook Taye, a senior adviser at the ministry of finance.

The government 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 said.

"We expect to have a strong interest," he said.

A consortium led by Kenya's top operator, Safaricom (SCOM.NR), secured the first licence. South Africa's MTN (MTNJ.J) had also bid in the first round but it was not awarded a licence.

Safaricom's winning bid of $850 million could serve as a guide for the price of the remaining licence.

"At least there is a benchmark and to uplift this benchmark we are working on amending the policy," Brook said, citing the automatic inclusion of the right to operate mobile financial services, which was not present in Safaricom's licence.

Mobile financial services have become a significant part of African telecom operators' businesses since Safaricom pioneered them with M-Pesa in 2007, giving people an alternative to banks.

State monopoly Ethio Telecom, which launched a new mobile financial service called Telebirr in May, snagged 4 million users within weeks, showing the potential of the market.

A separate sale of a 40% stake in Ethio is going on, part of a drive to liberalise the sector and also open up the broader economy. read more

The economic reforms were initiated by Prime Minister Abiy Ahmed, whose troops are engaged in fighting with local forces in the northern region of Tigray, when he came to power in 2018.

Writing by Duncan Miriri; Editing by David Goodman and Bernadette Baum

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