Only three commercial radio frequencies in Addis Ababa, of the six that were up for grabs by the Ethiopian Broadcast Authority (EBA), have been awarded to the businesses that offered for them.
One Love PLC, Arki Promotions and ED Stelar Event Management are now owners of the eighth, ninth and tenth commercial radio frequencies in Ethiopia, advancing the share of private radio stations in Ethiopia from their current share of 15pc to 20pc.
Thirteen frequencies were on offer, with six earmarked for the capital, Addis Ababa. The remaining were floated to operate outside of the city. The Authority found a total of seven offers from six companies.
On Thursday March 24, 2016, only those that raced towards the six Addis Ababa-based offers were opened.
Lack of information and fear of not profiting is holding companies from participating, Zeray Asegdom, general director of EBA opined.
“I guess that they do not see the demand,” he said, “or maybe they fear the cost.”
This is the second time the invitation to tender was issued. Despite the fact that 39 had shown interest by buying the documents the first time around, only four had proposed. From those, only one – a company whose identity the Authority did not wish to disclose – had passed all requirements before the bid was cancelled.
“Potential investors haven’t shown enough interest,” Workineh Tafa, public relations head of EBA had said at the time, adding that the requirement that was hard met was the financial one.
Notwithstanding, two of the contenders, One Love PLC and Habesha Weekly were both confident that they were the ones who passed as both had offered proposals exceeding 20 million Br.
Having participated in the Ethiopian Broadcasting Corporation’s (EBC) last three special holiday programmes for Christmas and the New Year, Adonic Worku, co-owner of Habesha Weekly, estimated that there would be returns on the investment in three years’ time. They intended to bring to the public information and entertainment that was geared towards business and was offered in a contextualized, Habesha way.
One Love is also no stranger to the field. Entertainers Seifu Fantahun and Serawit Fikre, household names in Ethiopia’s entertainment scene, partnered with Zerihun Assefa a new faceless name in the public sphere, to create the brand. Zerihun, a source close to the circle claims, is brother of Mahider Assefa, the renowned young actress who has recently joined the confidantes’ circle of Sheikh Mohammed Al Amoudi.
This might have implications on both for the success and inclination of a future radio station backed by the proprietors. Each of them is a force to be reckoned with in their respective niches within the entertainment industry. But also, they may be influenced by the richest man in the country with whom they are affiliated.
Profits in this sector mainly derive from advertisement, a sphere in which Seifu and Serawit already have a significant presence.
Twenty per cent of every show, or 12 minutes of every hour on air is usually reserved for commercials.
“Making profits won’t be a problem, Serawit said. “As airtime on the radio is much cheaper than on TV, the market is inclusive of a broader client base.”
But those pioneers in the businesses see less than a rosy ride.
“It’s good for the audience they get more options,” said Zerihun Teshome, CEO of Zami FM 90.7. “But being profitable is not easy, networking plays a bigger influence than professional excellence.”
Turning a profit takes time, and ads are controlled by a few, he explained.
The work is challenging, admits Sheger Radio owner Teferi Alemu, but he claims the market is profitable nonetheless.
This does not explain the paucity of interest in the November and the January calls. The Authority therefore re-issued the bid and adjusted requirements to encourage more participation. The financial requirement for a cashier payment order (CPO) of eight million Birr, or six million Birr if the company already has a studio, was decreased by two million Birr.
Also, the January deadline was postponed to increase participation after the Authority claimed they had received various requests, especially from regional competitors. That bid was cancelled in February, for the same reasons. But only one of the four proposals received passed evaluation.
One Love PLC, Arki Promotions, ED Stelar Event Management, Medco Bio Medical College, Habesha Weekly, and Elcam submitted proposals. Only the first three passed the first round of evaluations.
Yet, in the span of a few months, history repeated itself as the three that failed did so because they had not submitted CPOs.
“We had hoped to award them all,” said Mulugeta Sisay, director of mass media at EBA, “but only these passed the requirements.”
Medco Bio Medical College, had submitted two proposals, one for Addis, in Amharic, and the other for Meqelle in Tigrigna. Both were to have informative, medical themes, said Mekonnen Hagos (PhD) proprietor and president.
The nine million Birr proposed for Addis failed because a CPO was not attached with the documents. The bid for the regional states has yet to be opened, though their fate is so far unknown, they admitted that they entered similar proposals and no CPO.
They have submitted complaints but are not satisfied with the replies, said Jemal Suleiman, company consultant. He claimed they were not aware that CPOs had to be submitted.
“We are looking into why so few have participated,” said the Director General. He also said that they have not yet decided what to do with the remaining frequencies that have not yet been awarded.
Irrespective of the outcome of the tenders for radio stations, and without being able to explain why participation is sluggish, the Ethiopian Broadcast Authority has now announced that it is accepting project proposals for satellite transmitted TV stations. Successful proposals can receive licenses from the Authority starting from March 22, 2016.
[addisfortune.net/articles/]