Ethio Telecom sells 10% stake via mobile money service

The Ethiopian incumbent has been embroiled in the privatisation process for years, making the sale of an initial 10% stake something of a landmark. However, there has been some misinformation in the press regarding the sale – amongst other things, it does not coincide with the launch of the new stock exchange in Ethiopia – and the telco's decision to use its Telebirr service to sell the shares is also something of a novelty.

Ethio Telecom has a link to the share sale on its website, but it was not working on Wednesday, the day slated for the share sale to begin. As such, we're relying on Bloomberg for the information.

Earlier this week the newswire shared details from an Ethio Teleco invitation to the share sale, in which it confirmed the process would start on 16 October and would be carried out through Telebirr. But there's not a lot else to go on at this stage, and there has been no official announcement from the telco itself. Or at least, no functional announcement.

Nonetheless, we have no reason to believe the share sale is not going ahead as planned.

Ethio Telecom will be one of the first companies, if not the very first, to list on Ethiopia's new securities exchange, something Bloomberg mentioned. It also quoted the leader of the government's investment arm, which owns Ethio Telecom, as talking up the importance of the share sale for that exchange.

"This initial public offering will help us to learn and strategize to facilitate the listing of other state-owned enterprises on the Ethiopian Securities Exchange," Brook Taye, CEO of Ethiopian Investment Holdings, told the newswire.

This information seems to have been misinterpreted by a number of media outlets, with some jumping to the conclusion that the new securities exchange – in the pipeline for many years – would launch on Wednesday with Ethio Telecom as its first listed company.

But that is in fact not the case, as the stock exchange itself spelled out.

"We would like to clarify that while recent news regarding Ethio Telecom's planned listing has generated excitement, the Ethiopian Securities Exchange (ESX) will not be launching next week," the exchange posted on LinkedIn at the weekend.

"The launch of ESX is scheduled for a later date," it said. "We will provide updates on the official launch timeline and look forward to introducing Ethiopia's new stock market in the near future."

There have been rumblings about a November start date for the exchange, but it seems that is not yet set in stone.

In addition, the ESX shared a commentary piece written by its chief executive Tilahun Esmael Kassahun, in which he explains the link between Ethio Telecom's IPO and its future listing.

"Contrary to recent media coverage, the primary offering of Ethio Telecom's shares was not expected to occur on the Exchange's trading platform. Rather, once investors fully subscribe to Ethio Telecom's publicly offered shares, they will be listed on the Exchange for secondary market trading," he explained. "This approach aligns with global best practices and ensures investors have a regulated and efficient platform for buying and selling securities after the IPO."

That should be enough to clear up any speculation around the share sale, for now, at least. Once it has completed this initial sale and its stock exchange listing, Ethio Telecom will at some point turn its attention back to the job of attracting a foreign investor to take a bigger stake the company. There was endless discussion around its previous failed attempt, with big telco names like Orange and e& in the frame. The next attempt will likely be no different.

But first, the listing. Next month. Maybe.