French telecommunications giant Orange has officially declared its withdrawal from the bid to acquire a substantial 45% stake in Ethiopia's primary operator, Ethio Telecom.

The decision marks a shift from Orange's earlier interest in 2021 to engage in the partial privatization of Ethio Telecom, a major telecom entity with over 70 million subscribers and a historical monopoly in the Ethiopian market.

"Orange confirms that it has opted to withdraw from the ongoing process concerning the sale of 45% of Ethio Telecom,"

stated the company in a communication to Reuters.

Ethio Telecom responded, stating,

"After thorough analysis, the Group believes that the conditions aren't conducive for swift execution of our strategy and the fulfilment of a project that would generate value for the company."

Ethiopia, Africa's second most populous nation with around 120 million people, has seen its telecommunications industry become a central focus of Prime Minister Abiy Ahmed's economic reforms since he assumed office in 2018.

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In May 2021, a consortium led by Safaricom, Kenya's major operator, secured the initial private license, marking the first competition for Ethio Telecom. However, the sector's further liberalization has faced challenges, including a two-year civil conflict in the Tigray region ending in November 2022 and demanding macroeconomic conditions.

Recent developments include the government's cancellation of a process to grant a second private telecom license due to insufficient market interest. Ethiopia initiated a tendering process for a 40% stake in Ethio Telecom in June 2021, later postponing the sale in March 2022 citing economic conditions. The process was revived in November 2022, accompanied by an increased stake offer in February.