Ethio Telecom, the state-owned telecommunications company, has been granted a broker license by the Capital Markets Authority of Ethiopia, enabling the company to sell 10% of its stake directly to local investors through its TeleBirr application. This initiative marks a shift from the previously planned method of selling shares through the Ethiopian Securities Market.
According to Dr. Brook Taye, Chief Executive Officer of Ethiopian Investment Holdings, who spoke at the African Investment Conference in London on September 28, 2023, Ethio Telecom will begin offering shares starting from Wednesday, October 18, 2023. The decision to use the TeleBirr app for the sale of shares is intended to simplify the process and avoid the costs associated with an Initial Public Offering (IPO).
Share Offering and Market Development
The Ethiopian government had earlier indicated that 10% of Ethio Telecom’s total value would be made available for local stock buyers as part of its broader economic reforms. While the Ethiopian Securities Market was originally expected to manage the sale, the plan has been altered, allowing Ethio Telecom to facilitate the process independently through its digital platform.
Ethio Telecom’s broker license, issued by the Capital Markets Authority, permits the company to directly manage document-based transactions for the sale of its shares. This move comes in conjunction with the upcoming launch of the Ethiopian Documentary Market, which will officially begin its services next month and is expected to further develop the country’s investment landscape.
Financial Performance and Future Goals
Ethio Telecom, which is celebrating its 130th anniversary this year, reported earnings of 93 billion birr in the 2022 fiscal year. The company aims to increase this figure to 163.7 billion birr in the coming years as part of its long-term financial objectives.
The decision to offer shares to the public is part of the government’s broader strategy to increase private participation in state-owned enterprises, and it aligns with the country’s overall economic goals of expanding local investment opportunities.
Ethio Telecom’s decision to sell shares through its TeleBirr app represents a notable step in Ethiopia’s evolving financial system. By utilizing its own platform, the company aims to streamline the investment process for local investors. This move also highlights the Ethiopian government’s focus on enhancing public engagement in the country’s key industries as part of its broader economic reforms.
