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Lewis Njoka @LewsiNjoka

East Africa’s most profitable company Safaricom could know the fate of its bid for a telecommunications license in Ethiopia next week.

The firm expressed to start operations in the horn of Africa nation last year November after the Ethiopian Telecommunications Authority invited bids for two licenses.

In February, Safaricom is said to have made it to a shortlist of six companies allowed to bid for the license from a list of twelve that had expressed interest.

Our source reveals that the “Ethiopian authorities are likely to announce the deal next week”.

Safaricom’s bid for the license in a consortium with Vodafone and Vodacom will .

Already, Safaricom has signed an agreement with US International Development Finance Corporation (DFC), formerly known as Overseas Private Investment Corporation (OPIC), to borrow up to $500 million (Sh54.3 billion) to fund the Ethiopia expansion.

Policy framework

Despite the bid being highly competitive, Safaricom stands a fairly good chance having advised Ethiopia Telkom on building a policy framework for mobile, hence understands the country’s policy environment.

Additionally, Safaricom could benefit from Kenya’s charm offensive into the country which saw the Ethiopian Prime Minister which Abiy Ahmed visit Kenya in December last year, where the two countries committed to boosting trade ties between them.

Other companies that had submitted an expression of interest were Etisalat, Axian, MTN, Orange, Saudi Telecom Company, Telkom SA, Liquid Telecom, Snail Mobile and the two non-telecom operators, Kandu Global Telecommunications and Electromecha International Projects.

Estimated to cost Sh110 billion, analysts say while Safaricom’s entry into Ethiopia could hurt it in the short term, it is a worthwhile venture.

The government of Kenya is the majority shareholder in Safaricom owning 35 per cent, same as Vodacom.

Vodafone owns five per cent while the remaining five per cent is owned by various retail investors.