Safaricom Lead Consortium Wins Ethiopian Teleco License

Ethiopia government has given ago ahead to Ethiopia Communication Authority to award a license to Global Partnership for Ethiopia which is a consortium led by Safaricom and includes Vodafone, Vodacom, Safaricom & Sumitomo Corporation.

The group have will pay $850M for license and committed to an $8.5 B investment.

“We will soon open a bid for the remaining licence,” said Balcha Reba, director-general of the Ethiopian Communications Authority speaking to Reuters.

The other contender MTN’s offered of $600 million and didn’t get the license.

Global Partnership for Ethiopia Consortium 

Vodafone, the British multinational telecommunications company is partnered with Vodacom, Safaricom, CDC Group, and Sumitomo Corporation for the Ethiopia license.

Vodacom, the South African operator which is owned by Vodafone majoritively is also part of the group. Vodacom will own 6.2% of consortium.

Safaricom, a Kenyan Telecom giant is a lead partner in Ethiopia’s bid. In February, Vodafone told Capacity its Kenyan subsidiary Safaricom “will be the lead partner” in the bid for Ethiopia. In confirmation of that news, ” During an investors conference call, Vodacom Group CEO Shameel Joosub said that Safaricom will have 51% ownership in the Ethiopian telecommunications firm”. Safaricom later increased the it’s share to 56%.

Speaking about the structure of the new Ethiopian entity, Safaricom told Reuters that “for structuring purposes, the respective consortium members may invest through special-purpose investment vehicles”.

Sumitomo Corporation, a Japanese global corporation with activities in mining, infrastructure, and other industries is also part of the consortium. According to Capacity, the technological support for Ethiopia’s operation will come from Sumitomo. Sumitomo has been working in Myanmar with KDDI ( Japanese telecommunications operator ) and Myanmar state-owned telecommunication operator MPT. MPT partnered with Sumitomo and KDDI in 2014 right after Mynamar liberalized the telecommunication sector and awarded Norway’s Telenor and Qatar-based Ooredoo a new Teleco license. The goal of the partnership was to bring operational excellence to MPT through funds, technology, and operational expertise that will be contributed from the partners.

Sumitomo will own 25% of the group.

CDC Group, UK’s development finance institution is also part of the consortium.

CDC group is expected to take 10% of the new consortium.