A consortium that includes South Africa’s Vodacom has been awarded a licence to provide telecommunication services in Ethiopia, a country that until recently locked foreign companies out of the sector.
Other members of the consortium – called the Global Partnership for Ethiopia – are Kenya’s Safaricom, and the UK’s Vodafone and development finance agency CDC Group, as well as Japan’s Sumitomo Corporation.
The consortium submitted a $850-million bid for the licence, significantly higher than $600-million from South Africa’s MTN.
“The Council of Ministers has unanimously made a historic decision allowing the Ethiopian Communications Authority (ECA) to grant a new nationwide telecoms licence to the Global Partnership for Ethiopia, which offered the highest licensing fee and a very solid investment case,” said Ethiopian Prime Minister Abiy Ahmed.
The consortium is expected to invest $8.5-billion over the next ten years, creating over 1.5-million jobs.
“Our desire to make 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,” said Abiy.
Africa’s second-most-populous country hopes that the opening up of one of the world’s last major closed telecoms markets will create millions of online job opportunities.
Ethiopia had hoped to award two telecoms licences, but received only two financial bids. At least 12 companies had expressed interest in investing in the country’s telecoms sector.
The ECA plans to retender for the second licence.
The Ethiopian market offers substantial potential, considering that the mobile penetration rate stands at 45%, in a country with a population of 110-million.