French telecommunications company Orange pulled out of the bid to acquire a stake of up to 45 percent in the Ethiopian telecommunications operator, Ethio Telecom, coming as a major relief to Kenya’s Safaricom.
Orange had initially expressed interest in participating in the partial privatisation of Ethio Telecom in 2021.
The Ethiopian Communication Authority is set to issue the second license to the successful bidder by the end of this year.
“Orange confirms that it has decided to withdraw from the ongoing process regarding the sale of 45 percent of Ethio Telecom,” the firm is quoted by Reuters news agency.
The Group says that the conditions do not allow for the rapid deployment of its strategy and the completion of a project that would create value for the company.
Orange and Emirates E& were among the top contenders vying for a 45 percent stake in Ethiopia’s mobile industry, setting the stage for competition with Safaricom which is already in the market.
The telecommunications sector in Ethiopia, the second most populous country in Africa with approximately 120 million people, has been a focal point of Prime Minister Abiy Ahmed’s efforts to liberalise the economy since assuming power in 2018.
The initial tendering process for a 40 percent stake in Ethio Telecom began in June 2021, but in March 2022, Ethiopia decided to postpone the sale due to economic conditions.
The process was later resumed in November 2022, with an increase in the stake on offer announced in February.
Ethiopia’s mobile phone sector is targeting to attract 21 million users for the service in its first year of operations with projections for the five years standing at 33 million.
Safaricom led consortium that includes its parent firms Vodafone and Vodacom, British development finance agency CDC Group and Japan’s Sumitomo Corporation won the second telco license award after submitting a financial bid of $850 million in 2021, defeating 12 other firms that had expressed interest as well.