Home ECONOMY Fate of Safaricom bid for Ethiopia to be clear next year

Fate of Safaricom bid for Ethiopia to be clear next year

by biasharadigest
Market News

Fate of Safaricom bid for Ethiopia to be clear next year

Safaricom headquarters in Westlands, Nairobi.
Safaricom headquarters in Westlands, Nairobi. FILE PHOTO | NMG 

The fate of Safaricom’s bid for a telecommunications licence in Ethiopia will be known by the end of next year at the earliest, according to new disclosures.

The Ethiopian government plans to auction two new licences besides selling a stake in its monopoly Ethiopian Telecommunications Corp.

The International Finance Corporation (IFC), which was appointed by the Ethiopian government to provide transaction advisory services, says its mandate runs until December 31, 2021.

This means bidders for the new licences or stake in the existing operator will likely be picked around the time IFC will be concluding its assignment.

“IFC will support the Ministry of Finance issue two new full-service telecommunications licences, in line with the objectives of the Government of Ethiopia to liberalise the telecommunications sector,” the global financier said in a disclosure

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Safaricom has announced it will team up with its South Africa-based parent firm Vodacom Group to make a bid for one of the licenses.

They could spend more than about $1 billion (Sh106 billion) in the transaction besides start-up costs if their bid is successful.

Safaricom has also not ruled out seeking a stake in the current operator. The timelines indicate the telco’s balance sheet will remain unburdened for at least two years.

The company has settled most of its debt and has in recent years concentrated on paying dividends and investing in infrastructure.

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