The monopoly of the phone is a grand prize in Ethiopia sell-offNaija247news



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A woman walks past an Ethio Telecom office in the Ethiopian capital, Addis Ababa, on November 9, 2015. REUTERS / Tiksa Negeri

ADDIS ABABA / JOHANNESBURG (Reuters) – Ethiopia has announced privatization plans State control, foreign businessmen paved the way for Belachew Mekuria's office
"Everyone is here, MTN is here, Safaricom, I mean that everyone is coming, "said the new president of the Ethiopian Investment Commission (EIC), who said that strong competition was entering the previously banned telecommunications sector. Including the United States, by the way, "Belachew, an affable lawyer who is the first stop for foreign investors, said with a smile after an evening meeting with an officer of the Kenyan mobile operator Safaricom [19659003] the government will also open Ethiopian Airlines, the state logistics company and the monopoly of electricity to private investment – the Ethiopian telecommunications monopoly is the price because of its huge protected market.

But the liberalization of forms takes and the speed with which it is The government, which came to power in April, toppled Ethiopia with a vertiginous movement towards openness.

On the diplomatically, he made peace with neighboring Eritrea and campaigned for reconciliation with the exiles.

iy aimed at loosening the government's hold on strategic sectors after decade s centralized socialist planning and authoritarian rule.

The impact of reform in the second-most populous nation of sub-Saharan Africa could be huge for multinationals. a handful of areas.

International telecommunication firms in particular are eager to enter one of the few African telecom sectors – one serving a population of 100 million – always protected by a state monopoly.

enter as soon as possible. Andrew Kitson, head of telecommunications research at BMI Research, told Reuters: "THEY NEED A FOREX"

These companies have been looking at Ethiopia for years.

Reuters reported this month that Safaricom, whose parent companies are Vodacom in South Africa and Vodafone in Britain, is in advanced negotiations to present its popular mobile money service M-Pesa.

MTN, which operates in 24 countries in Africa and the Middle East, declared the Ethiopian market

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Orange, whose subsidiary Sofrecom won a two-year contract for the management of Ethio Telecom in 2011, is also interested.

"If the State opens a process of privatization or search for a partner for Ethio Telecom, we would be in the running. That's certain," said a source close to the record [19659003ViettelaVietnamesestate-ownedcompanythatoperatesorholdslicensesinMozambiqueBurundiCameroonandTanzaniaisconsideringopportunitiesinEthiopiaOtherpotentialcontendersincludeEtisalatandZainfromtheMiddleEastKitsonsaid

A Zain spokesperson was not immediately available. Etisalat did not respond to a request for comment.

Although the contest has already started, no one knows what the final price will be.

The government has not yet chosen consulting firms to give its opinion on the overall form of privatization, which will include the badessment of Ethio Telecom. 19659003] Possible scenarios described by government officials include the sale of a minority interest, the opening of the sector to competition by the granting of new licenses to several telecommunications operators or a combination of two.

The most immediate challenge of Ethiopia

"They need new sources of foreign currency now and one of the ways is to open up to foreign investors." I do not think not that there is a shortage of technical expertise in the country, "said a senior telecommunications officer at Reuters.

Over the past decade, the government has focused on growing light manufacturing sectors and clothing, however, despite heavy state investment in infrastructure, exports have been slow to take off, creating a serious shortage of dollars.

The central bank governor refused last week to give Reuters the Economists think that they spend between one and two months of import cover.

The sale of a piece of Ethio Telecom, which has more than 60 millions of mobile subscribers, could provide currencies foreign if necessary.

This is a model that Ethiopia has used before.

In two transactions in 2016 and 2017, Japan Tobacco International (JTI) purchased more than 70 percent of the total. The Ethiopian national company of tobacco company shares.

Although the company only had annual revenues of about $ 15 million, the government included a 10-year monopoly, according to a rival bidder. JTI paid close to $ 1 billion for the faceoff.

Investor interest for Ethio Telecom could be reduced, however, once it's forced to open its books to bidders

"We have no idea of ​​the size of this company.What are its liabilities, what are its weaknesses.All we know, is how many subscribers," Kitson said

The government also said that the state will maintain a majority stake and control of the board of directors, which could discourage investors.
striving to alleviate the shortage of foreign exchange, encouraging the huge diaspora to send dollars home, and courting the UAE and Saudi Arabia. Saudi Arabia for deposits in the central bank

. If the main purpose of privatization is to stimulate competition to improve services by stimulating the economy, the government may want to take another turn.

"You can not develop the manufacturing sector without efficient telecommunications and cheaper telecommunications services." the Belachew of EIC said.

Although it would not generate the same amount of foreign currency, the authorization of other operators could boost government revenue through spectrum license fees and taxes on mobile services a d SIM card sales

With one of the lowest mobile penetration rates in Africa – about 60 phones per 100 inhabitants – there are many opportunities for growth

The government may fear fears . Addis' main cash cow would struggle to keep pace with international competition over prices and services.

One way would be to spread liberalization, starting with the sale of a minority stake in Ethio Telecom and, once the partnership has reached maturity, open the market to new players.

Despite the enthusiasm of the Ethiopian authorities and the companies involved, little has been decided

The government still needs to establish the bodies that will oversee its privatization plan. It must then engage financial advisors and perform an badet valuation prior to auctioning.

It could be two years or more before new investors enter the industry, badysts said.

But the current dynamic is encouraging, observers say. And officials like Minister of Public Enterprises Teshome Toga are quick to play the government's determination to follow through on his announcements.

"In the past 20 years, we have sold 377 fully or partially privatized companies," Teshome told Reuters. "The only difference now is that we are venturing into big business."

Additional reportage by Mathieu Rosemain in Paris and Alexander Cornwell in Dubai; Editing by Giles Elgood

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