After launching operations in late 2022, Safaricom Ethiopia has now established itself as a competitor to state-owned incumbent Ethiotel, although the latter still has most of the market share. Safaricom has committed US$3bn to its network infrastructure, growing points of presence. While the government has tried to mandate infrastructure sharing, most sites are single tenant and the MNOs do not seem to be colocating on many towers.
Safaricom is very keen on bringing in a towerco partner to offload the enormous amount of capex and opex it is spending on its network. So far, Nokia and Huawei have been managing network rollout for Safaricom and Ethiotel, subcontracting to a number of small MSPs. Safaricom has also signed with Woda PLC, the country’s first local tower manufacturer, to help mitigate high costs of imports.
However, there is no current licensing framework for towercos. The Ethiopian government is currently trying to sell a 45% stake in Ethiotel to privatise the firm and raise additional capital. Orange, which was in talks with the government, ended discussions after a recent flaring of conflict.
Following this, the government plans to issue a 3rd MNO license, and has been in discussions with several MNOs including Orange, VEON and e&. It is expected that a towerco license will come alongside or after the 3rd MNO license, which means it is unlikely to happen until the Ethiotel stake is sold first.
Safaricom has deployed over 3,000 new sites in Ethiopia since it’s launch, but rollout has been enormously capex-intensive and the MNO is hoping to enter into a sale leaseback discussion of some form. The Ethiopian government still needs to issue the licensing for tower infrastructure sharing, which is expected to follow the privatization of Ethiotel and the issuing of a 3rd operator license.
ESCOs have seen more success in Ethiopia, with Energy Vision and IPT Powertech being awarded contracts with Ethiotel. Safaricom plans to offload power to a towerco in a power-as-a-service deal as part of a sale leaseback.
