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Safaricom gets a 56% stake in global partnership for Ethiopia consortium

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The mobile network operator has raised its controlling stakes in Global partnership from 51% to 56%

East Africa’s mobile telecommunication giant Safaricom has raised its controlling stake in global partnership for Ethiopia consortium that has bid for one or two telecom licenses in Ethiopia. The latest ownership arrangement on the consortium was disclosed by SA-based Vodacom Group which holds a 34.9 percent stake in the Kenya telco giant. But the exact detail was revealed by Shameel Joosub, Vodacom’s Chief executive who unveiled the new ownership percentages at an investor briefing. Safaricom owns 56 percent, Japan’s Sumitomo 25 percent, CDC 10 percent, Vodacom 6 percent, and the rest is owned by the UK sovereign investment fund.

However, he did not explain the circumstances or the exact reason for the change of ownership. Vodafone’s stake has also gone up, as before it stood at 5 percent. The primary reason why Safaricom was given the leadership is because of its close geographical proximity to Ethiopia. Ethiopian Communications Authority (ECA) that Safaricom and another Safaricom consortium led by MTN Group were the only two parties bidding on the auction of two operating licenses.

Some media reports point that at some point they were a bit concerned by the alleged lack of transparency in the process and requirements that winners build their own network infrastructure such as towers. Additionally, they also felt that they were not ready to pay the amounts expected by the Ethiopian government.

Safaricom’s chances of winning one of the licences increased exponentially after nine other firms dropped out of the bidding process. The firms that dropped out of the bidding process are Orange, Etisalat, Telkom SA, Snail Mobile, Axian, Liquid Telecom, Electromecha International Projects, and Kandu Global Communications. The amount bid by Safaricom and MTN Group are expected to be disclosed after Ethiopia announces the result of the bidding.

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