Exclusive: France’s Orange withdraws from process to buy stake in Ethio Telecom

French telecoms firm Orange

On Monday, the French telecommunications company Orange (ORAN.PA) informed Reuters that it had decided to pull out of the process to buy up to 45% of the Ethiopian operator Ethio Telecom.

Ethio Telecom was a former monopoly with more than 70 million users. In 2021, Orange expressed interest in participating in the company’s partial privatization, Ethiopia’s envoy to Paris announced at the time.

“Orange confirms that it has decided to withdraw from the ongoing process regarding the sale of 45% of Ethio Telecom,” the company said in a statement to Reuters. “Orange confirms that it has decided to withdraw from the ongoing process regarding the sale of 45% of Ethio Telecom.”

“After analysis, the Group believes that the conditions do not allow for the rapid deployment of our strategy and the completion of a project that would create value for the company.”

Ethio Telecom and Ethiopia’s finance ministry, which presides over the bidding process, did not immediately reply to demands for comment.

After coming to office in 2018, Prime Minister Abiy Ahmed made liberalizing the economy one of his top priorities. The telecoms industry in Ethiopia, the second-most populous country on the African continent with over 120 million inhabitants, was considered the grand prize of this effort.

In May 2021, a consortium led by Safaricom (SCOM.NR), the leading operator in Kenya, was awarded the first private license to compete with Ethio Telecom.

A civil war that raged in the northern Tigray region for two years ended in November 2022, and challenging macroeconomic conditions hampered further industry liberalization.

At the beginning of this month, the government announced that it would not proceed with a procedure to grant a second commercial telecommunications license due to inadequate demand from the market.

In June 2021, Ethiopia had an initial tendering procedure for a forty percent ownership share in Ethio Telecom. However, in March 2022, the government of Ethiopia announced that it would be delaying the sale due to the state of the economy. After that, in November 2022, it began the process again, and in February of the following year, it raised the share being offered.

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