Ethiopia Pauses Plan to Sell 35% of Ethio Telecom Shares











The Ethiopian government has shelved its plan to sell 35% of Ethio Telecom to foreign investors, stalling a key step in the country’s much-publicized economic reform program.

According to sources, the share sale will not take place in the near future. Authorities are also reassessing how potential domestic shareholding might influence future privatization. For now, there are no plans to sell additional stakes—either to foreign companies or local investors.

Ethiopia’s Telecom Privatization Drive

For decades, Ethio Telecom operated as a state monopoly, serving over 60 million subscribers and ranking among Africa’s largest telecom firms. However, Ethiopia’s leadership identified telecom liberalization as central to its broader Homegrown Economic Reform Agenda, launched in 2019 to attract foreign investment and modernize key sectors.

In 2021, the government awarded a new telecom license to Safaricom Ethiopia, a subsidiary of Kenya’s Safaricom PLC and part of the Vodacom–Vodafone group. The license, valued at $850 million, represented Ethiopia’s first-ever foreign investment in telecoms. Safaricom has since expanded rapidly, rolling out mobile money (M-Pesa) and competing directly with Ethio Telecom in voice and data services.

The government simultaneously announced its intention to partially privatize Ethio Telecom by selling 35% of shares to a strategic foreign partner. The goal was to boost efficiency, attract expertise, and generate foreign currency to ease Ethiopia’s chronic forex shortages.

Why the Sale is Delayed

Several factors appear to be behind the freeze:

Macroeconomic pressures: Ethiopia faces inflation, debt challenges, and foreign exchange shortages, making investor appetite more cautious.

Political instability: Conflicts in different regions have dampened investor confidence in large-scale state asset acquisitions.

Safaricom’s rollout: With Safaricom Ethiopia still in its early expansion phase, regulators may want to observe market dynamics before opening Ethio Telecom further.

Domestic shareholding debate: Authorities are still discussing how potential local investment in Ethio Telecom would impact valuation and future foreign sales.

What This Means for Ethiopia’s Telecom Future

By halting the sale, the government signals a slower, more cautious approach to privatization. Ethio Telecom will remain fully state-owned in the near term, even as Safaricom’s arrival has transformed Ethiopia’s telecom landscape.

Ethio Telecom has responded to competition with price cuts, new data packages, and the Telebirr mobile money platform, which already boasts over 30 million users.

Safaricom Ethiopia, meanwhile, has attracted millions of subscribers since launching, betting big on mobile money adoption to replicate its Kenyan success.

For consumers, competition has driven lower costs, better service, and more digital options, though Ethiopia’s telecom penetration still lags regional averages.

The Road Ahead

Ethiopia’s telecom sector remains one of Africa’s most promising, given its population of over 120 million and rapidly growing digital economy. But the latest move shows that the government is recalibrating its reform pace, balancing the need for foreign investment with political, economic, and social considerations.

For now, Ethio Telecom stays in state hands, while Safaricom Ethiopia continues to scale up. How the government manages this balance will determine whether Ethiopia can fully unlock its digital transformation ambitions.