The first stage in the opening up of one of the continent’s
largest telecoms markets is now complete as Ethiopia’s communications regulator
has revealed that it has received interest from 12 potential buyers of two
Up to now, state-owned Ethio Telecom has had a monopoly
on the phone and internet business in Ethiopia, which has a population of 109
The introduction of competition could transform the market
and boost the number of mobile subscribers, which stood at 37 million in 2017
according to the World Bank.
In a statement, the Ethiopia Communications Authority (ECA) said
that of the 12 submissions, nine were from telecoms operators, two were from
non-telecoms companies and one was incomplete.
Among those interested are:
A joint South African-Kenyan-British bid from Vodafone,
Vodacom, and Safaricom
- South African company MTN
For investors remaining sidelined after the market’s impressive bounce back, the opportunity may now be too enticing to ignore. According to J.P. Morgan strategist Nikolaos Panigirtzoglou, COVID-19 will drive equity supply growth as companies pivot away from buybacks in an effort to raise capital, with 2019 marking the first time since 2015 that the net supply of shares, or the share issuance adjusted for de-listings and buybacks, increased materially.Alarming for investors, the previous decade-long trend of declining equity supply in part fueled the market’s bull run as buybacks pushed earnings higher. Some analysts also point out that a larger equity supply could weigh on stocks and cause volatility if companies don’t purchase shares when their stocks fall.Panigirtzoglou, however, takes a different stance. He notes that the drop in buybacks hasn’t negatively impacted the market yet. In fact, he argues the low returns for both bonds and cash will