Ethio Telecom IPO struggles to attract investors as hopes fade

Ethio Telecom IPO struggles to attract investors as hopes fade is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• Ethio Telecom raised only $150 million from its initial public offering, far short of expectations.
• The poor result highlights challenges for emerging market telco privatisations amid political and economic uncertainty.

What happened: Weak demand overshadows Ethio Telecom’s partial sale

Ethio Telecom’s highly anticipated partial privatisation has failed to meet expectations, raising just $150 million against hopes of a much larger sum. The Ethiopian government offered 10% of the state-owned operator, but only 1.5 billion birr ($26 million) came from the general public, with the rest taken up by state institutions. Prime Minister Abiy Ahmed’s administration had hoped the offering would symbolise Ethiopia’s commitment to liberalising its telecoms sector and attract foreign capital. Ethio Telecom, the dominant operator in Ethiopia with over 72 million subscribers, remains a key pillar of the government’s broader economic reform plans. However, despite optimism when the IPO was announced in 2021, local economic challenges, foreign exchange shortages and regional conflict have severely dampened investor confidence.

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Why it’s important

The failure of the Ethio Telecom IPO is a major blow to Ethiopia’s ambitions to modernise its economy and telecoms market. It raises deeper concerns about the attractiveness of state assets in unstable political environments. Ethiopia’s telecoms reform was once seen as a flagship project, with the entry of Safaricom Ethiopia in 2022 hailed as a landmark moment. Yet, the disappointing IPO result shows that domestic and international investors remain cautious. The broader trend in emerging markets is also worrying: privatisations in countries like Nigeria and Kenya have faced similar struggles, reflecting how political risk, currency instability, and regulatory uncertainty weigh heavily on telecoms deals. Ethio Telecom’s failure to secure strong investor interest suggests the government must now rethink its privatisation strategy and improve the investment climate. Without significant reforms, future asset sales — including a second telecoms licence Ethiopia hopes to issue — may also underperform, weakening prospects for digital growth and economic modernisation in the region.