Ethio Telecom (Ethiopian Telecommunications Company), the country’s major internet and service provider, will be the first company to list on the East African country’s new stock market next week.
The company, which has monopolized the telecommunications industry of the country for several years where it serves about 120 million population, is set to be partly privatized, and enter the record books on stake.Etbio
Following the bourse establishment and the privatization of the government-owned enterprise, the company will make a record mark, as the Ethiopian government is set to trade a 10% stake in it next week.
The move is part of Prime Minister, Abiy Ahmed’s plans to extend investment authority to private investors for greater participation. Instead, a further 45% stake will also be available for purchase by private investors after the 10% stake.
“This is something that we have to look into after the 10% sale because that will give us a sense of valuation,” Brook Taye, the CEO of its owner Ethiopia Investment Holdings said.
Ethio Telecom’s monopoly of Ethopia’s telecommunication industry was halted in 2022 after a consortium led by Kenya’s Safaricom won the country’s first privatized telecom license.
“We still think that this is a three-operator market, especially when you add the B2B (Business to Business) and B2C (Business to Customers) sectors, and broadband services to houses and offices. It’s a huge opportunity,” Brook said after backing the government’s ambition to launch a second private telecom right.
He again added that the country is wide open to receiving more investors which will reshape the face of Ethiopia’s economy. “So we’re still very much interested, and welcome any interest from operators.”
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Extension of Private Investors to External Banks
As part of the process to express open hands to private investors and reshape the face of the telecommunication sector in Ethiopia, the government is again set to welcome investors from the banking industry.
According to the CEO of Ethiopian Investment Holdings, Dr. Brooks, the country is open to receiving investors within and outside the country. He expressed that after an act of parliament which will legally back the plan, Ethiopia will be ready to welcome external private banks into the country
“We’re hoping that by the next two, three months, parliament will adopt or enact the new proclamation, and with that, we’re hoping to see a significant number of continental giants operating in Ethiopia as private banks,” Brook said.
He further confirmed that several banks across neighbouring countries in the Northern and Western parts of Africa are ready to invest in the country.
“We’re seeing banks in our neighbourhood looking at Ethiopia, we’re seeing North African banks looking at Ethiopia, and some of the household banks in West Africa also looking at Ethiopia. It’s a huge market and we can absorb several foreign banks coming in.”
Ethiopia Economic System
The Eastern African country, which operates a mixed economy system, is characterized by a large percentage of public owned organizations.
Although the country is in a strong process of making moves to privatize several government-owned organizations, the telecommunications, banking and transportation sectors are still highly dominated and controlled by government organizations.
With the country set to embark on a huge transition to entertain a series of private investors, Africa should be in anticipation of Ethiopia’s economic trend.
