Fortune News | Sep 11,2020
The Ethiopian Communications Authority is set to send a request for qualification (RFQ), the next step to issuing two new telecom licenses, this August. The RFQ will be sent to the companies that will be screened from the 12 companies that have shown interest in joining Ethiopia's telecommunication market.
Last week, the telecom and radiofrequency regulatory body received interest from a dozen companies including prominent global telecom operators to secure full-service telecommunication licenses in Ethiopia. Nine of the companies are telecom operators, while two are non-telecom operators and the remaining submission was incomplete.
The Global Partnership for Ethiopia, a consortium of telecom operators comprised of Vodafone, Vodacom and Safaricom; Etisalat; Axian; MTN; Orange; Saudi Telecom Company; Telkom SA; Liquid Telecom; and Snail Mobile are the telecom operators that submitted an expression of interest for the licenses. Kandu Global Telecommunications and Electromecha International Projects are the two non-telecom operators that showed interest.
The companies responded to the call from the Ministry of Finance and the Authority for the submission of expressions of interest for the issuing of two new full-service telecommunication licenses. In their documents, the companies submitted information on their organisational structure, financial status, global operating footprint, details of countries of operation and the number of mobile phone subscribers, among others.
"We'll thoroughly go through the documents provided by the companies and will pick companies that will be able to take part in the next process," said Balcha Reba, director-general of the Authority. "The next stage will be a more technical and rigorous screening process."
The Authority then will launch a request for proposal (RFP) for the companies that make it past the RFQ stage to pick the two winning companies, which will get a 15-year license that will enable them to provide combined services for mobile, internet and fixed calling along with Ethio telecom.
It should be no surprise that many companies interested in joining the telecom sector of the country, according to Terrefe RasWork, a telecommunications engineer who has worked for the International Telecommunication Union (ITU) for over three decades.
"Without a doubt, Ethiopia has a large population that would be lucrative for these companies to tap into," said Terrefe. "The issue is how much will they pay for it in these dire times."
Clearly, the companies would pay more if economic conditions were safer. The current political situation could also potentially affect the value of the licencing fee, according to Terrefe.
The expert recommends that the liberalisation process take place after the election is held and the Novel Coronavirus (COVID-19) pandemic is contained throughout the world.
As part of ending the state monopoly of the telecom industry, the government has established the Ethiopian Communications Authority as an independent regulatory body that will be mandated with issuing two new telecommunications licenses and regulate the sector. Since its establishment, the Authority has been bracing itself for the liberalisation process by hiring companies to advise on the procedure and legislate new laws.
Along with the Ministry of Finance, the Authority hired the International Finance Corporation (IFC) as a transaction advisor for the licensing process. IFC also took on board four international consultants in charge of the technical aspects; taxes and auditing; and the legal and communications issues.
The Authority has also drafted five directives that enable the regulatory body to license companies, handle dispute resolution, governing consumer rights and protections, regulating the quality of service and the issuing of numbers.
The three full-service license holders, including Ethio telecom, will be privileged with a range of spectrum across multiple frequency bands. They are required to commit to reasonable tariffs, universal accessibility and teledensity targets.
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