Ethiopia to Open Tender for Telecommunication Licenses in 15 Days

Ethiopian Communication Authority is set to announce the tender for two Telecommunication licenses in 15 days and the winners are expected to join the market until April 2021.

According to Balcha Reba, Director General of ECA, the tender for two Telecommunication licenses will be opened in 15 days. The Authority has been working to open the Ethiopian Telecommunication market for competitors after the government decided to liberalize more than 2 years ago.

The tender is expected to be open for 40 – 50 days.  That will be followed by an assessment of documents submitted by the bidders and picking the winners. Agreement with the winners and issuing of the license is expected to happen in March/April based on the latest timeline from the authority.

ECA has prepared and published dozens of directives, regulations, and frameworks to manage the upcoming competitive market. The recent ones being a Mobile Number Portability Directive, Telecommunications Wholesale National Roaming Directive, Universal Access, and Service Framework, and  Universal Access Fund Regulation.

Ethiopian Communication Authority and the Ministry of Finance hired the International Financial Corporation (IFC) as a transaction advisor of the liberalization process. Other firms that are part of the process includes Roland Burger, EY, GONG, Jones Day, and Coleago Consulting.

Despite the opening of the market for new players and partial privatization, the Ethiopian government has made a decision not to allow Telcommuncation Infrastacture firms to enter the markets. This is aimed at protecting Ethio Telecom and the Infrastructure investment that has been made by state monopoly for the last 10 years.

Foreign-owned Telecommunication companies are not also allowed to directly get access to mobile money license.  This will definitely prohibit upcoming foreign telecommunication companies to engage in the financial service sector in Ethiopia. While it’s not yet clear how Ethio Telecom will also be allowed to operate in the Mobile money sector if it is partially privatized, the CEO of Ethio Telecom recently announced that the State-Owned Teleco will launch a mobile money service in Ethiopia.

During a recent consultative meeting with Stakeholders, Ethiopia Communication has presented that they will consider Commercial value, Economic value, and Social value when the spectrum valuation is decided for the new licenses.

In addition, the authority has informed the public that Ethiopian Marco economic realities and future growth potential, population growth, market share Price, expected revenue throughout license years, Teleco usage and traffic growth, cost of sales and growth margin, technology strategy, and capital expenditure, operating free cash flow and margin and Mynamar’s experience ( a recent market that liberlized) will be some of the techniques that will be considered in the pricess of spectrum valuation.

It is remembered that Ethiopian Communications Authority requested for Expression of Interest and has announced that it received 12 submissions. The 9 applications were from Telecom operators that included the Global Partnership for Ethiopia (a consortium of telecom operators made of Vodafone, Vodacom, and Safaricom) as well us Etisalat, Axian, MTN, Orange, Saudi Telecom Company, Telkom SA, Liquid Telecom, and Snail Mobile.

When the official tender is announced both those that submitted the EOI and that didn’t are allowed to submit a bid.

Image Credit – ENA