Ethiopia will reopen bidding for its second telecoms operator licence in August, Reuters reported, citing two senior government officials. The licence includes the right to provide mobile financial services. Balcha Reba, director general of the Ethiopian Communication Authority (ECA) said changes made could raise its value, for instance, the provision of mobile financial services.
The International Finance Corporation (IFC) will serve as transaction adviser in the deal, said Brook Taye, a senior adviser at the Ministry of Finance. Taye said the government expects strong interest, including from firms that had expressed an interest in the previous attempt to sell the licence but whose bids were deemed insufficient.
Ethiopia sold only one of two full service licences on offer in May, citing a lower-than-expected price for the second one, which it now wants to offer again. A consortium led by Kenyan operator Safaricom secured the first licence. South Africa's MTN had also bid in the first round but was not awarded a licence.
Safaricom's winning bid of USD 850 million could serve as a guide for the price of the remaining licence. Taye said there is at least a benchmark and to uplift this benchmark, the government is working on amending the policy, citing the automatic inclusion of the right to operate mobile financial services, which was not present in Safaricom's licence.
Mobile financial services have become a significant part of African telecom operators' businesses since Safaricom pioneered them with M-Pesa in 2007, giving people an alternative to banks. State monopoly Ethio Telecom launched a new mobile financial service called Telebirr in May and attracted 4 million users within weeks, showing the potential of the market.
A separate sale of a 40 percent stake in Ethio Telecom is going on, as part of the drive to liberalise the sector and open up the broader economy.
