June 21 polls seen as a key test of democratic reforms under Prime Minister Abiy Ahmed.
Ethiopia’s telecommunications regulator has awarded an operating licence to a consortium led by Kenya’s Safaricom and Japan’s Sumitomo, according to officials, a move that will end the state’s monopoly over its stunted telecoms sector.
The consortium, which includes Vodacom, Vodafone and British development finance agency CDC Group, paid $850m for the licence, Brook Taye, a senior adviser at the finance ministry, said on Saturday.
South Africa’s MTN had also bid for a licence, but its bid of $600m was deemed too low.
The Safaricom-led consortium is set to create up to 1.5 million new jobs and bring $8.5bn in investment over 10 years, according to the government.
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. 1/2 pic.twitter.com/Ht6z95BHzZ
— Abiy Ahmed Ali 🇪🇹 (@AbiyAhmedAli) May 22, 2021
“This will be the single largest FDI [Foreign Direct Investment] into Ethiopia to date,” Prime Minister Abiy Ahmed said in a Twitter post. “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.”
Abiy’s government planned to award two new telecoms licences, but in late April it announced it had received only two bids after some firms that initially expressed interest – including France’s Orange and the UAE’s Etisalat – opted not to submit.
Balcha Reba, director-general of the Ethiopian Communications Authority, said the second licence would soon be re-tendered.
The licences are expected to bring an infusion of cash, jobs and infrastructure investment.
The Safaricom-led consortium will provide 4G and 5G internet services, and by 2023 a low-orbit satellite will be put in place to provide nationwide 4G coverage, Brook said.
“A momentous day for Ethiopia!” he wrote on Twitter.
“Imagine the quality service and efficiency it will engender, the new opportunities, millions of jobs and the transformative effect to our economy!”
Ethiopia’s telecoms reforms also include a plan to sell a stake in Ethio Telecom, a move officials hope will make the firm more efficient.