Kenya’s biggest telecoms operator Safaricom Plc., is looking to be part of a joint bid as the telco seeks to tap into the Ethiopia’s telecom market later this year,
Acting Chief Executive Officer (CEO), Michael Joseph, has confirmed plans the company is looking for funding for the joint bid from a consortium including parent Vodacom Group Ltd. and two other entities.
“We do know the investment to build the network in Ethiopia will be big… So all of us will have to borrow to invest. The composition of the consortium will be on your willingness and your capability of taking on debt and your willingness to take a risk.” Michael Joseph said in an interview at the company’s Nairobi headquarters.
The Ethiopian government has openly made it clear it will appreciate the introduction of competition into the telecoms market and has set a deadline of 22 November 2020 for companies to show interest in a telecoms licence.
Safaricom says it will make an offer to Ethiopia by April 2020 and according to Joseph. The government of Prime Minister Abiy Ahmed hasn’t yet provided guidance on the bidding process, including any limits on foreign ownership hence the delay.
Safaricom says to be able to make the entry it has to be part of a joint bid because of the likely high costs. Joseph puts the cost at about sh100 billion ($1 billion) in licence fees and network costs. “It’s a consortium because it’s a big investment. I cannot provide names.”
Safaricom made a revenue of 250 billion Kenyan shillings ($2.47 billion) and earned profit before tax of 91 billion shillings ($900 million) according to its latest annual report for the year ending 31st March 2019
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