Ethio telecom, the lone telecom operator, hired KPMG East Africa to conduct its business valuation. Kicked off earlier this month, determining the market value of the entire businesses of the company is expected to take eight weeks.

The company's management hired KPMG by a single sourcing procurement method through negotiations. The latest contract is an extension of the project KPMG was awarded last year to conduct an asset valuation of the company for the first time at International Financial Reporting Standards (IFRS) adoption. KPMG East Africa was paid close to one million dollars for the contract it delivered a few months ago.

Ethio telecom's management requested KPMG to deliver its valuation methodology, which is expected to cover book-to-floor inventory.

KPMG, which will be paid close to 611,785 dollars for the service, is also expected to propose the years the enterprise valuation will cover. Before kicking off the process, the executives of the telecom operator need to approve the methodology.

"We chose KPMG as it already worked on the asset valuation," said Frehiwot Tamiru, CEO of Ethio telecom. "It's the advantage of having ample and basic information about the company."

KPMG's representatives declined to comment on the matter.

The company's asset valuation conducted by KPMG showed that the economic value of Ethio telecom's resources has appreciated by 42pc. Ethio telecom is one of the state-owned companies that will be partially privatised. Retaining 55pc of the shares, the government will avail 40pc and five percent of its stake to a foreign company and local buyers, respectively.

For the partial privatisation process, the Ministry of Finance hired Deloitte Consulting as a transaction advisor seven months ago. Along with undertaking legal due diligence and recommending a feasible mode of privatisation, Deloitte will review the initial asset valuation and conduct a five-year enterprise valuation of the telecom giant.

"Our business valuation will help us triangulate the value with the one to be conducted by Deloitte," Frehiwot told Fortune. "It'll also help us to have an internationally accepted valuation that shows the company's economic value."

The Ministry and the Ethiopian Communications Authority have started the process of issuing licenses to two new telecom operators. The Authority issued a request for proposals in December and targets to issue the licenses in March.