Ethiopia

Ethiopia halts foreign bids for Ethio Telecom stake

Ethio Telecom employees work inside their call centre in the Bole neighborhood branch in Addis Ababa, Ethiopia July 29, 2022. (Reuters)

By Erick Kariuki | Friday, June 14, 2024

The government's initial plan to sell 45 per cent of Ethio Telecom to foreign investors was cancelled in November after Orange SA withdrew its bid.

The Ethiopian government has announced the suspension of the sale of Ethio Telecom to foreign investors.

This move comes amidst ongoing discussions about the strategic importance of the state-owned telecom operator and its role in the nation's economic and technological landscape.

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The government's initial plan to sell 45 per cent of Ethio Telecom to foreign investors was cancelled in November after Orange SA withdrew its bid.

This made the government to shift its focus from selling the Ethio Telecom to foreign investors to investing locally with domestic retail investors.

“There were bidders, but each of them has left the process at one point,” Abdurehman Eid, the Chief Executive Officer of Ethiopian Investment Holdings said.

He also added that the level of foreign interest was not as high as Ethiopia had hoped for, stating that the domestic retail investors in Ethiopia are showing a “huge appetite” for the shares.

In an interview, the minister noted that Ethio Telecom will start to focus on foreign investors as soon as it is listed on the Ethiopian Securities Exchange in October.

In October 2023, Ethiopia officially launched the Ethiopian Security Exchange (ESX). Since then, important steps have been taken to create a working stock exchange.

The ESX was set up as a share company, following the Capital Market Proclamation approved in July 2021. Additionally, the Ethiopian Capital Market Authority (ECMA) was established to regulate ESX and other market participants, ensuring investor protection.

The company is set to be listed on the ESX as it has become one of the largest telecommunications operators in Ethiopia operating as a monopoly for decades alongside Ethiopian Shipping and Logistic Services Enterprise(ESLSE), Berhanena Selam Printing Enterprise and Ethiopian Insurance Corporation(EIC) which are state-owned.

As of January, it had 74.6 million subscribers and reported a profit of 11 billion birr ($191.6 million) for the first half of the year.