French Company withdrew from buying Ethio Telecom Shares

Orange, a prominent French telecom company, initially had aspirations to acquire approximately 45 percent of Ethio telecom’s shares. However, the company ultimately withdrew from the deal, citing challenges in swiftly implementing their strategic ideas and achieving desired results.

The backdrop of this decision is Ethiopia’s ongoing evaluation of its telecommunications market, with the intention of introducing a third telecom service provider alongside the existing state-owned Ethiotelecom and Safaricom, which recently entered the market.

In addition to exploring new market dynamics, Ethiopia is also in the process of divesting less than half of Ethiotelecom, attracting interest from international giants such as Orange. However, Orange has now communicated a scaling back of its initial demand, as revealed in a statement to Mobile World Live.

Upon careful analysis, the Orange Group stated, “We believe that the current conditions do not allow for the rapid implementation of our strategy and the completion of the project in a manner that would create value for our company.”

Alongside Orange, the UAE-based E& Company has expressed interest in acquiring Ethiotelecom’s shares, indicating a continued international interest in Ethiopia’s telecom sector.

Orange had first expressed its interest in acquiring shares of the state-owned telecom company two years ago during a bidding process, but the government announced the termination of the sale process after a year. Following a delay, the process was reopened, leading to Orange’s recent decision to withdraw.

Ethiopia, grappling with economic challenges arising from conflicts and war, is actively working to open up its market to attract foreign investment. Mamo Mehretu, the governor of the National Bank, shared insights into ongoing efforts to open the banking sector to foreign competitors.

In an interview with Mamo The Banker, a UK-based magazine specializing in the sector, Mehretu highlighted Ethiopia’s relaxation of regulations hindering companies focused on exporting products and attracting foreign investment.

He also mentioned ongoing discussions with international partners, expressing hope for an agreement with the International Monetary Fund (IMF) to bolster Ethiopia’s foreign exchange reserves.

While Safaricom Ethiopia, which entered the Ethiopian telecom market through an international auction two years ago, has reported acquiring over 4 million customers, it faces challenges.

The company cited security concerns in Ethiopia and inflation as impediments to its operations. Safaricom Ethiopia also revealed plans to initiate telecom services in the Tigray region, which has been embroiled in conflict for over two years.

Ethiopia’s economic challenges, including mounting debt, have prompted discussions with the World Bank, IMF, and China to explore options for rescheduling the debt payment period.

The Prime Minister Abiy Ahmed’s government announced that actively engaged in such discussions as part of broader efforts to stabilize and revitalize the Ethiopian economy.


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