When Safaricom breaks ground in Ethiopia to lay down key telecoms infrastructure in the near term, the move will mark two key milestones for not just the company but the country.
For starters, the leading local telco will be the first foreign entrant into Ethiopia’s isolated ICT sector which will serve to disrupt the monopolistic stronghold of the State backed Ethiotelecom.
Secondly, Ethiopia will be seeing its biggest foreign direct investment (FDI) from the transaction.
Barely one month after successfully bidding for two available telco licenses, Safaricom and its partners, which include parent firms Vodacom and Vodafone UK making up the Global Partnership for Ethiopia consortium, the firm was earlier on Saturday, May 22, named the winner of the only issued license.
This to beat South Africa domiciled MTN Group whose bid fell shy of the mark.
By opening up its telco space to the outside world for the very first time, Ethiopia will be backing itself to catch up to the rest of the globe.
“Our desire to take Ethiopia fully digital is on track,” said Ethiopia’s Prime Minister Abiy Ahmed on the backdrop of the landmark announcement on Saturday.
“Today marks a decisive day for our economic reform path in Ethiopia. With the liberalization of the telecom market through a fair and transparent process, the government enables every Ethiopian to access quality services at an affordable price, added Ethiopia’s Finance Minister Ahmed Shide.
Until today, Ethiopia made up part of the last remaining frontiers for growth by global telecom firms.
While many operators, some larger than the Global Partnership consortium stayed off the bidding, Safaricom and pals stood by its bid to strike gold.
The company had technically one foot in the country after the near barren bidding that only saw interest from MTN Group despite 12 operators filing their expressions of interest (EOI) mid-way through 2020.
With an estimated population of more than 100 million persons, Safaricom has a new blank page for growth, north of its principal market in Kenya.
Safaricom and its partners are expected to invest an estimated Kes.864 billion ($8 billion) over the next decade.
The local giant will similarly reap the most dividend from the project as it holds a 56 per cent stake in the consortium according to disclosures made last week by the Vodacom Group.
Back home, the news on the successful telco license bid is tipped to firm up investors interests in the company which already dominates equities trading at the Nairobi Securities Exchange (NSE).
At the opening of trading on Monday, May 24, Safaricom share surged to historic high of Kes.42.