Could the long delayed partial sell-off of Ethio Telecom finally be taking place? Ethiopia’s Prime Minister Abiy Ahmed has indicated this week that his government is discussing selling 10% of the state-owned telecoms company.
However, the sale of Ethio Telecom is not going to happen via an external stock exchange; it is to take place through a local stock exchange that is being launched this year.
According to messaging on social media platform X, Abiy described the launch of the East African country's stock exchange as "a game-changer, supporting Ethiopia in achieving its growth aspirations and attracting new capital".
According to a source quoted by Reuters, the government plans to retain 45% of Ethio Telecom, sell 45% to investors and list 10% on the stock exchange.
Who will buy the 45% is unclear. We reported in November 2023 that Orange had pulled out of plans to acquire a 45% stake in Ethio Telecom, stating it saw no new value creation by going ahead with the move.
As for competition for Ethio Telecom, we also reported in November that the Ethiopian government had cancelled the process of issuing a third telecoms licence due to lack of interest. Some reports have suggested that potential bidders have been put off by security problems, legislative changes and concern about the government's commitment to opening up the tightly controlled economy.
Thus Safaricom Ethiopia is the only competition for Ethio Telecom at the moment, and, for now, it looks as though the battle for subscriber numbers (the population of about 120 million is by no means all signed up) will continue to be waged by only two operators.
