After Failed First Bid, MTN Opts Out Of Ethiopia, Renews Rwanda’s Operating License

Mobile Telecommunications Network (MTN) has said it is unlikely to resubmit a bid to enter to enter the Ethiopian telecoms market, implying it would opt-out operations in the African country.

Bloomberg had reported citing sources familiar with the matter that the move came after Ethiopia announced earlier this week plans to re-open bidding on second operator license including the right to operate mobile financial services. 

Analysts believe that MTN’s action was partly due to its inability to provide mobile money services throughout the length and breadth of the country. It would be recalled that the Ethiopian government had stated that its licensees could only offer telecom services, in the process shutting out mobile services dealers.

The Director-General of the Ethiopian Communication Authority, Mr. Balcha Reba moved to dispel the fears when he earlier in the week inferred that the government has made “have made some changes that can uplift its value, for instance mobile financial service.” 

According to Bloomberg’s sources, both MTN and the Ethiopian minister of finance have not reached a consensus and haven’t made an official statement regarding the circulated talks. It is thus believed that the telecom giant MTN, seeing that that the investment risk is starting to outweigh the benefits, decided to throw in the towel. 

There is another school of thought that inferred that the civil war in the north of Ethiopia and tensions around a new giant dam on the Nile, may have scared MTN, as the country needs around 7,000 – 8,000 new mobile towers to increase coverage in the area. 

According to sources familiar with the matter, building these new towers carries additional risk in times of unrest.

There were also other unconfirmed talks that MTN’s first bid was rejected due to its backing by Chinese investors, an insinuation that cannot be authenticated. It was also presumed in same quarters that the winning bid from the Safaricom consortium had financial backing from the U.S. Development Finance Corporation (DFC).