Kenyan operator Safaricom has opened talks with undisclosed investors to form a consortium that will this year bid for one of two Ethiopian telecoms licences, reports Business Daily. A consortium is needed because of the high entry costs, which are likely to exceed KES 100 billion. The operator said it was racing to assemble the group of investors ahead of its Ethiopian bid, which is expected in April.
In 2019, Safaricom talked of a joint bid with South Africa’s Vodacom, which owns a 35 percent stake in the firm. However, sources at the company said that more firms could be involved in the consortium.
Safaricom CEO Michael Joseph told the Business Daily the company has not made any decisions such as a source of funding yet, as the constitution of the consortium has not been finalised. Joseph declined to provide names of the investors. He had earlier said that it would require a "billion-dollar range" for licence fees and network expenses.
Ethiopia plans to award permits later this year, opening the country’s telecoms market to foreign investment for the first time. Ethio Telecom, the state monopoly, has also taken steps towards offering a minority stake to a strategic investor. Safaricom is considering all the options.
For Safaricom, an acquisition would be easier than setting up its own shop, which would involve buying land, putting up buildings, hiring staff, recruiting subscribers and expanding its market share against a dominant player like Ethio Telecom.
