MTN Joins The Race To Enter Ethiopia’s Telecommunications Industry

MTN Joins The Race To Enter Ethiopia’s Telecommunications Industry. MTN has teamed up with the Silk Road Fund, China’s state-owned investment fund that mostly bankrolls infrastructure, energy and resource projects, to buy one of two telecommunications licences in Ethiopia. It joins Vodacom in the race to enter Ethiopia.

MTN confirmed its bid for a telecommunications licence in Ethiopia, joining a consortium led by Vodafone Group, which also expressed an interest in acquiring a licence to make a foray into the east African country. In a statement MTN said “other partners in its consortium will be disclosed on a successful bid outcome”. France’s Orange and Zimbabwe’s Econet Global have also shown an interest in bidding for a licence.

According to Daily Maverick, since 2020, Ethiopia has attempted to privatise its multibillion-dollar telecommunications industry by awarding two licences to private-sector players to end the government’s monopoly. Ethio Telecom, which is owned by the Ethiopian government, is the major provider of telecommunications services in the country. As part of the privatisation of its telecommunications industry, a stake of at least 49% in Ethio Telecom will also be made available to private investors.

Former  MTN president and CEO, Rob Shuter’s  expressed interest has now been shared by present MTN Group president and CEO Ralph Mupita. “Ethiopia provides the largest telecommunication and digital services growth opportunity in Africa over the medium term, and fits into our pan-Africa focus and platform strategy. We are being guided by our capital allocation framework in our assessment of this opportunity,” Mupita told Daily Maverick.

Peter Takaendesa, a senior portfolio manager at Mergence Investment Managers, said Ethiopia is a hotly contested country, as every company wants exposure to the market considering its growing population and slow penetration of telecommunication services. “It is the last remaining large market that hasn’t been explored by international companies. All other countries in Africa allowed international companies to come in around 2000-2001. That’s when MTN started a very aggressive rest-of-Africa expansion.” Takaendesa told Business Maverick.

By Thomas Chiothamisi

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