The Ethiopian government awarded Global Partnership for Ethiopia consortium, which is led by Safaricom, a telecommunications license to operate in Ethiopia. Safaricom, which is a U.S.-backed consortium, includes its parent firms Vodafone and Vodacom, British development finance agency CDC Group and Japan’s Sumitomo Corporation. The consortium won the award after submitting a financial bid of $850 million. The group had won financial backing for the multibillion-dollar project from a newly created U.S. foreign-aid agency. The consortium beat the other 12 competitors to emerge among the best six shortlisted by the Ethiopian Communications Authority in February 2021.
The losing bidder was South Africa’s MTN Group Ltd., whose proposal was financed in part by a Chinese investor. The result of the auction gives the United States a victory in its push to challenge China’s economic influence around the world.
PM Abiy Ahmed Ali, through his Twitter handle on Saturday, said: “The Council of Ministers has unanimously made a historic decision today, allowing Ethiopian Communications Authority to grant a new nationwide telecom license to the Global Partnership for Ethiopia, which offered the highest licensing fee and a very solid investment case.”
The Prime Minister noted that the process was competitive and said that “Our desire to take Ethiopia fully digital is on track. I would like to thank all who have taken part in this for pulling off a very transparent and effective process.”
According to DataReportal, there were 44.86 million mobile connections in Ethiopia in January 2021. As per the data in January 2021, the mobile connections in the country were equivalent to 38.5% of the total population. In terms of internet consumption, about 23.96 million people accessed the internet in Ethiopia in January 2021, and this translated to 2.8 million new users (13%) between 2020 and January 2021. The data also established that were 6.70 million social media users in Ethiopia; this number increased by 500,000 (8.1%) between 2020 and 2021. The social media users were equivalent to 5.8% of the total population in January 2021.
Safaricom is attracted by the growth potential in the Ethiopian market, whose population of over 110 million offers a penetration rate of 44 per cent. The Safaricom consortium will likely rely on funding from deep-pocketed foreign investors such as the US International Development Finance Corporation (DFC) and CDC Group, given the size and international nature of the Ethiopia investment. South Africa’s Vodacom and United Kingdom’s Vodafone own a combined 40 per cent stake in Safaricom.
