We assess the Ethiopian license opportunity noting that both Vodacom and MTN are amongst several interested operators who are keen to enter the market. We compare Ethiopia to peers in Africa and show that it lags significantly on the basis of mobile and data services penetration, and, there is little to no fixed line infrastructure to speak of. This suggests that the market still provides significant organic growth opportunity for a mobile operator. Using African markets which have similar GDP per capita, and what we know about the existing incumbent operator, we apply a DCF valuation to estimate the value of a new operator in Ethiopia. We summarise feedback from a former telecoms executive on our valuation assumptions and also potential risks related to the Ethiopian telecoms market.
