Vodacom and MTN both want a piece of the Ethiopian pie.
- MTN and Vodacom are both in the running for Ethiopia’s new nationwide telecommunications licence.
- Ethiopia, which is primarily served by state-owned firm Ethio Telecom, is attempting to transform its telecoms sector.
- Vodacom is the largest of the two by market capitalisation, but MTN has the most subscribers on the continent.
- This is how they are dividing the continent between them.
- For more stories, go to www.BusinessInisder.co.za.
South African companies MTN and Vodacom have both placed bids in Ethiopia to operate a nationwide telecoms licence, a move that would help one, or both, extend their footprints on the African market – and gain a significant number of customers in Africa’s second-most populous country.
The two have gone head-to-head in several countries on the continent, while dividing large parts of the rest between them.
With a population of more than 117 million people, Ethiopia is in the process of awarding two nationwide telecoms licences as part of its attempt to overhaul its telecoms sector and opening up access. The major player in that country currently is a state-owned firm, Ethio Telecom.
In a statement on Monday, the Ethiopian Communications Authority (ECA) said it had received bids from two telecoms giants, MTN and the Vodacom group. Vodacom, Vodafone, and Kenya’s Safaricom have jointly submitted their bid.
“We are delighted to have had interest from established telecoms operators from around the world, commensurate with this unprecedented opportunity, including from Africa’s two telecommunications’ giants’, MTN- the largest mobile operator on the continent, and the Vodafone/Vodacom consortium including Kenya’s largest telecoms provider, Safaricom,” Eng Balcha, director of the ECA said.
MTN, the largest mobile operator by subscribers on the continent, serves 280 million customers across 21 markets. The licence would be a key move in sharpening its focus and gaining growth on the African continent after its exit out of the Middle East.
MTN group president and CEO Ralph Mupita said the company’s participation is aligned with its Ambition 2025 growth strategy, focusing on digital acceleration across the continent.
The company is participating with equity partners the Silk Road Fund from China and others for the bid.
“Ethiopia provides the largest telecommunication and digital services growth opportunity in Africa over the medium term and fits into our pan-Africa focus and platform strategy. We are being guided by our capital allocation framework in our assessment of this opportunity,” Mupita said.
Vodacom is the largest mobile company by market capitalisation in Africa and is followed by Safaricom, which Vodacom owns in part. Safaricom has more than 35.6 million customers.
Vodacom serves a population of 296 million people on its mobile networks.
Here’s how MTN and Vodacom currently cover Africa.
Countries in which both MTN and Vodacom operate are in black, yellow is MTN only, and red is Vodacom only.
(Compiled by Ntando Thukwana)