Ethiopia spectrum licences could cost R15-billion

Safaricom, Kenya’s biggest company by market value, expects the pricing for new Ethiopian telecommunications permits to liberalise the industry could be as much as US$1-billion (R15-billion).

The Horn of Africa state is expected to invite bids for two new licences this month to compete with its monopoly Ethiopian Telecommunications, which is also slated for part privatisation in early 2020.

The bid for the Ethiopian spectrum could be “quite high”, acting Safaricom CEO Michael Joseph said on Friday in an interview after his company’s first-half earnings presentation.

“Then you have to spend another $1-billion on the network. There’s not many corporations that can do this on their own,” he said.

Safaricom intends to vie for one of the two permits in a consortium with three other firms including parent Vodacom Group and two financial institutions, Joseph said.

While Safaricom does not rule out participating in the privatisation of Ethio Telecom, it’s more keen on a greenfield operation, he told investors earlier.

108 million

Ethiopia has a population of more than 108 million people and almost 40 million active phone subscribers by the end of 2018. Ethio Telecom’s sales came in at $340.2-million in the July-September quarter, 21% more than a year earlier.

Safaricom’s first-half net income climbed 14% to 35.7-billion shillings ($345.7-million) after it booked 129.9-billion shillings of revenue.

Ethiopia is “the biggest prize left in Africa from a telecoms point of view”, Joseph said.  — Reported by Bella Genga, (c) 2019 Bloomberg LP