Vodacom Targeting Angola, Uganda, Ethiopia

South Africa-based mobile group Vodacom has confirmed that it is ready to expand its operational footprint across Africa, and is on the hunt for small-scale acquisitions. Vodacom, which is majority owned by the UK’s Vodafone Group, currently operates in five countries in sub-Saharan Africa, and chief executive Pieter Uys told Dow Jones Newswires that the company is looking to make a series of acquisitions in the USD100 million range.

Uys noted that Vodacom will focus on countries that offer a stable political environment, have densely populated cities and offer room for growth. As such, the CEO pinpointed Angola, Ethiopia and Uganda as likely targets. Announcing its FY11 results earlier this week, Vodacom noted that the financial year ended March was the first time that its operations outside South Africa have contributed positive cash flow. As a result, Uys told Dow Jones: ‘We feel more comfortable that we have the recipe to be successful outside South Africa’.


In March 2012 Sifiso Dabengwa, CEO of Vodacom’s chief rival MTN Group confirmed that his company was interested in lining up so-called ‘bolt-on’ deals in new African markets, once again naming Angola and Ethiopia. In the former, a third mobile licence has been expected for some time, with state-run incumbent Angola Telecom keen to secure an international partner to assist with its entrance to the sector. Meanwhile, Ethiopia is one of the few countries in Africa still operating a monopoly in the wireless sector, with state-run Ethio Telecom the sole licensee.

Elsewhere, Uganda is overcrowded by comparison, boasting six active wireless operators, with another, Sure Telecom Uganda, waiting in the wings. Of the country’s cellcos, Uganda Telecom Ltd and Warid Telecom Uganda are plausible targets, with the ownership of both companies coming under scrutiny in recent years.

ETC Acquires New Satelite System

Gilat Satellite Networks has announced that it is providing a broadband satellite communications network to Ethiopia's monopoly telecoms operator, Ethiopian Telecommunication (ETC).

The new network, covering hundreds of sites, will provide an upgrade to ETC's existing Gilat VSAT network and will enable ETC to deliver advanced broadband services, which include video and data-centric applications, to meet the growing demands of its enterprise and government customers. ETC will also deploy Gilat's VSATs at remote community centers nationwide to provide citizens with toll-quality telephony and reliable broadband internet access.

ETC will additionally enhance its service offering by extending the range of cellular services to the country's remote locations, through Gilat's SkyAbis cellular backhaul solution.

"Gilat's technology has proven to be the most reliable, and has enabled us to improve the quality of ICT in Ethiopia," said ETC's CEO, Ato Amare Amsalu. "In addition to being an excellent technology partner, we have also enjoyed outstanding service and support from Gilat for the past 12 years. We look forward to continuing to work together with Gilat to fulfill our commitment to provide advanced services that meet the critical communications requirements of our customers throughout the country."

FT Takes Over Managent of ETC

The management of Ethiopian state-owned fixed line incumbent Ethiopian Telecommunications Corporation (ETC) has been officially transferred to European giant France Telecom (FT), AllAfrica.com reports. It is understood that a deal between the French company and existing management at ETC was signed last week.

Under the terms of the agreement FT will take control of the telco on behalf of the Ethiopian government for a three-year period, and it will be paid an annual management fee, while there reportedly also remains a possibility of revenue sharing from enhanced services, although this has not been confirmed. It has, however, been claimed that the deal has yet to be sent to the Council of Ministers for approval.

FT, which faced competition from South Africa’s MTN Group and Indian state-owned telco Bharat Sanchar Nigam Ltd (BSNL) for the ETC management contract, will now be tasked with implementing the government’s ambitious plans to expand telecom services nationwide. The state has said that it wants basic telecom services made available within a radius of five kilometres to 100% of the population by the end of 2010

The government has set aside USD2 billion over a two-year period to expand the infrastructure, aiming to boost the number of Points of Presence (PoP) it has from 1,900 at end-2006 to 17,000 by end-2010. ETC is also aiming to increase fixed line subscribers to four million and mobile customers to 8.5 million by that date.

Ethiopia set To Liberalise Telecoms Market

­The telecommunications market in Ethiopia is on the verge of massive growth, leading to a wide range of investment opportunities in telecommunications and downstream information and communications technology (ICT) segments, according to a new study published by Technology Strategies International in partnership with BroadGroup TMT Ventures. The report predicts that by 2011 the state-owned incumbent, the Ethiopian Telecommunications Corporation (ETC) will have a privatisation timetable in place, and that liberalisation of the mobile market will take place shortly after that.

"The Ethiopian Government recognizes that the country is being left behind in terms of digital inclusion, and urgently needs to address this if it wants to reap the benefits that other African countries have demonstrated from embracing ICTs," notes Christie Christelis, President of Technology Strategies International. "It may also become an important political issue in the next elections."

While the Ethiopian Government is on record saying that it will not hasten the liberalization process, and will not succumb to pressure from the international community to liberalize its banking and telecommunications sectors in order to accede to the WTO, Christelis believes that there is neither any reason for, nor any benefit from delaying the process further.

"Liberalization of the telecommunications environment will create a raft of ICT investment opportunities in Ethiopia," Christelis says. "The Chinese have already recognized the potential of Ethiopia and are building an electronics manufacturing facility to address the high growth expected in demand for handsets and accessories. They are also providing supplier financing in certain telecommunications investments in order to address the shortage of domestic capital."

The report predicts that over the next five years the number of mobile subscribers in Ethiopia will grow at an annual rate of 43% (CAGR), to reach almost 20 million subscribers by 2014.

Christelis added that Ethiopia will provide a range of excellent investment opportunities for foreign investors interested in the ICT sector, but warns that the window will not be open indefinitely. He predicts that the next four years will be critical in shaping the Ethiopian ICT sector's future and will provide high return opportunities for foreign investors that have the risk tolerance, and ability, to capitalize on the coming surge in ICT-related markets.

Ethiopia Signs Up for SEACOM

Ethiopian fixed line incumbent, Ethiopian Telecommunications Corporation (ETC), has inked a deal with SEACOM for an international backhaul link via Djibouti, Computerworld reports. As a result of the deal ETC expects to lower the cost of bandwidth, and subsequently the cost to consumers for telecoms services. Commenting on the development, Amare Amsalu, ETC’s CEO, said: ‘SEACOM is ideally suited to provide international connectivity that will complement ETC's extensive national initiative to link the country's businesses and end-users with fibre broadband connectivity,’ adding, ‘The availability of high-quality broadband at lower prices will accelerate economic development and educational initiatives that will enhance lives and will also establish Ethiopia as an important commercial centre for Africa and as a regional transit point for other service providers.’

Under the terms of the deal it is understood that ETC will connect its domestic network to an undersea cable system that has been extended to the shores of the Red Sea. SEACOM has partnered with SEA-ME-WE 3, which operates a cable from South East Asia to Europe; TEAM, which has a Kenya to Dubai link; and the Eastern Africa Submarine Cable System (EASSy), which has landing points in six countries. Currently ETC provides its voice and data services via expensive satellite connectivity, operated by Hughes International, although it does also have a low capacity bandwidth connection via Port Sudan.

The agreement complements the ongoing Next Generation Network (NGN) project being undertaken by ETC, which aims to enhance and improve the country’s existing telecoms infrastructure nationwide. The USD1.5 billion project encompasses work on both fixed line and wireless networks, as well as the national fibre-optic backbone.

'French Firm' To Run Ethiopian telecom

Local news sources report that an unnamed French company is set to take over management of Ethiopian state-owned incumbent Ethiopian Telecommunication Corporation (ETC) having beaten off bids from South African and Indian competition. Having attracted the interest of a number of foreign companies on announcing that it was seeking a partner on a revenue-sharing basis, Capital Ethiopia claims that only three companies made it through to the final stage of the selection process; South Africa’s MTN, state-owned Indian telco Bharat Sanchar Nigam Ltd (BSNL) and the unnamed French company.

While the selection process has been concluded ETC CEO Amare Amsalu is quoted as saying: ‘I am out of the [Addis Ababa] and it is difficult to give releases without referring to documents.’ Additionally, it is understood that, while the winning bidders has been picked, further negotiations are still required, providing further reason for the lack of information being released regarding the deal.

What is known is that the firm selected to take over management of the telco will be responsible for introducing new schemes to reform how ETC conducts its core operations, from service provision to infrastructure maintenance. According to previous comments by Diriba Kuma, Transport and Communications Minister, the winning international firm will also be expected to boost ETC’s revenues.

At present ETC is undertaking a large-scale expansion scheme of all its networks and services, with improvements expected to include the rollout of a fibre-optic network. Previously Chinese vendor ZTE had been selected by ETC to assist with the construction of a new national infrastructure in three phases; currently ZTE is working on the third phase which covers expansion to rural and remote regions, and was started in October 2008, and is due for completion in the near future.

Commenting on the introduction of the ETC’s new management partner Minister Diriba noted: ‘The transformation process the new company is to lead will kick off as soon as the ongoing expansion with ZTE is completed.’

Ethiopia Launches Multi Million Network

Ethiopia launched on Sunday a multi million mobile telephone network to increase its mobile telephone subscribers to 12 million from the current 4.1 million.

Ethiopian Telecommunication Corporation (ETC) said that a six million expansion work for the mobile telephone is being carried out in the first phase of the project.

Ethiopia, home to 77 million people is still among the countries with low telephone network in Africa.

Ethiopia is also known for its expensive price of mobile telephone SIM card.

However, the corporation announced a price decrease as of April 2 2009

The previous $ 36 cost for the prepaid mobile phone SIM card was reduced to $ 16.

The price is still expensive compared to other African countries where SIM card is available for $ 5 and less.

The charge for replacement of lost or damaged SIM card was also lowered to $ 1.2 from $ 2.5 previously.

“The move was aimed at benefiting the public from the ever expanding telecom services in the country,” said ETC.