ETHIOPIAEthiopia’s Council of Ministers has amended the Ethio – Telecom establishment regulation to boost the telecom giant’s operation besides its traditional telecommunication service.

Capital newspaper has reported that the regulation amendment mainly targets to allow the state telecom operator to invest in the financial sector.

Currently, the government is in the process to partly selling minority shares of Ethio Telecom to foreign and local investors, while retaining majority shares in the telco.

Financial experts said that the Council of Ministers decision passed on January 8, would not contradict the process of the partial privatization.

However, some experts argued and expressed their confusion that since the enterprise’s 40 percent share would be owned by foreign investors indirectly it will allow foreign companies or individuals to be involved in the financial sector, which is exclusively given for Ethiopians and Ethiopians in Diaspora.

A source, which is close to the case, explained that it would not have any effect and the privatization process will be undertaken as per the given schedule.

“The cabinet decision is only amending the regulation that the telecom operators demand to expand its business to other sectors,” an expert who is familiar to the case explained.

“Due to that it will not be related with the privatization process. It will be clear when the privatization process and negotiation is finalized in the future. So far Ethio Telecom is a public enterprise, and you may not reject its demand to expand its operation and revenue,” the expert added.

“The privatization process is in the initial bid process for interested international investors for the 40 percent share”

According to the experts, there are different legal mechanisms that will be implemented regarding the ownership of operations.

It is expected that as per the amended regulation Ethio Telecom will be involved in mobile money business.

Recently the telecom giant CEO, Frehiwot Tamiru, disclosed that her enterprise has shown interest to involve itself in the financial sector like other telecom companies around the world.

Ethio Telecom had filed its application to the National Bank of Ethiopia, financial firms’ regulatory body, to launch a mobile banking service in the country.

The CEO disclosed that the regulatory body has given a green light to commence business on the new segment for one of the oldest enterprises in Ethiopia.

Currently, the privatization process is in the initial bid process for interested international investors for the 40 percent share.

Deloitte was hired by the Ministry of Finance as a transaction advisor besides undertaking a detailed due diligent, business valuation, tender document valuation and others.

The existing regulation that was amended in 2011 allowed the telecom operator to provide and make accessible next generation network-based world class standard information technology services; to engage, in accordance with development policies and priorities of the government, in the construction, operation, maintenance and expansion of telecommunications networks and services; and to provide domestic and international voice, data, video, and other related value-added services.

The statement that the Council of Minister passed on explained that the regulation is amended on the aim to abide Ethio Telecom with the industry’s fast development and dynamic circumstance and provides additional and related services by using its infrastructure.

Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE