Ethio-Telecom To Be Reorganized Into Two Business Processes Prior To Privatization

Ethio-Telecom To Be Reorganized Into Two Business Processes Prior To Privatization

Addis Ababa, June 17, 2019 (FBC) –The government of Ethiopia announced plans to reorganize Ethio-telecom, the state owned telecom service provider, into two business processes before privatizing the company.

One year has passed since the government decided to completely or partially privatize state-owned enterprises. Clear timetable for the privatization is not known yet.

Among the enterprises slated for partial privatization is Ethio-telecom. But, the government intends to completely privatize sugar factories.

The government had formed an advisory council and a committee that oversee the privatization process.

Moreover, the House of People’s Representatives (HPR) approved last week a draft law that enables foreign and local companies to invest in the telecommunications industry.

The law establishes an independent communications regulator that will be responsible for promoting competition.

According to Ahmed Shide, Minister of Finance, the government has been making all needed preparations prior to selling off a stake in Ethio telecom, which include restructuring the company into two business processes – the infrastructure and service sectors.

For Professor Alemayehu Geda, an economist, it is important to make the necessary precaution in privatizing state owned enterprises.

He said privatizing Ethio-telecom, which made the lion share out of the 29 billion birr generated from private enterprises in this Ethiopian fiscal year, in particular needs precaution.

But, Professor Alemayehu questions government’s intention and the timing to privatize Ethiopian airlines, which according to him is one of the profitable and competitive airliners. “What benefit could it bring if it is privatized now?”

“As the airlines is currently providing service similar to port and since it will have a political impact, it is my opinion for the privatization of this company to delay,” he said.

“Moreover, the investment carried out by the airlines should be taken into consideration,” he added.

When asked about government’s stance on the privatization of the airlines, Ahmed Shide said, “the objective of privatization is to boost competition. In this regard, the airlines has no problem. We don’t make decision in rush.”