African giants Vodacom, MTN battle for lucrative Ethiopia deal

The battle for the lucrative Ethiopian telecommunications market has narrowed down to consortia led by two of Africa’s telecom giants, Vodacom and MTN Group, setting another stage for their sustained competition for the continental market.

The bids of the two consortia led by Safaricom on the one hand, and MTN Group on the other, were opened by the Ethiopian Communication Authority (ECA) evaluation committee last week.

Vodacom, South Africa’s largest mobile phone operator, which owns 35 per cent shareholding in Safaricom, is in the consortium brought together by the Kenyan firm, also comprising the UK parent Vodafone, UK sovereign wealth fund CDC Group and Japanese conglomerate Sumitomo Corporation.

Nine other firms – Etisalat, Axian, Orange, Saudi Telecom Company, Telkom SA, Liquid Telecom, Snail Mobile, Kandu Global Communications and Electromecha International Projects – which had expressed interest in the deal, pulled out of the bidding process.

Safaricom, Vodafone and Vodacom offer voice, messaging, data, entertainment and financial services to at least 452 million customers in Africa, Europe and India.

Sumitomo Corporation’s operations include mobile telephony and development of the latest 5G technology, which is being built around the world. Safaricom launched its 5G network late March.

CDC Group, which has a £4.7 billion ($6.5 billion) war chest, is expected to help in funding the capital-intensive venture.