Safaricom launches in Ethiopia

Kenya’s biggest telco, Safaricom has launched a subsidiary in Ethiopia, a year after it became the first foreign company to be granted a telecommunications licence.

Safaricom switched on its network and services in the capital Addis Ababa following successful trials in 10 other cities. The Safaricom network will offer 4G data, voice and SMS services between Safaricom Ethiopia and Ethio Telecom customers.

Safaricom’s entry into Ethiopia ends a monopoly under state-owned Ethio Telecom in the tightly-controlled country of more than 110 million people.  The Ethiopian government had announced plans last year to end the state monopoly in the telecoms sector, a key plank of Prime Minister Abiy Ahmed’s economic reform agenda.

Mobile money service

Safaricom later announced it had secured a licence to operate a mobile money service in Ethiopia, following in the footsteps of neighbouring Kenya, where its M-Pesa service has become indispensable.

“The national network rollout will continue to reach 14 additional cities by April 2023.The licence is very important. It was part of the business plan”, Safaricom Ethiopia CEO Anwar Soussa told AFP at the company’s launch ceremony, adding that it could take two to three months to roll out the service.

Listed on the Nairobi stock exchange, Safaricom is one of the biggest companies in East Africa, its success fuelled by M-Pesa, which was launched in 2007. Safaricom is 35% owned by the Kenyan government and 40% by South Africa’s Vodacom, while the remaining shares are publicly listed.

In 2021, as part of plans to revamp the telecommunications sector, Ethiopia issued a tender to award two licences to private telecommunication operators. One licence was awarded to a consortium led by Safaricom, which offered $850 million and promised to invest $8.5 million over 10 years. Ethiopia also launched the process for a sale of a 40% stake in Ethio Telecom, but the plans were put on hold earlier this year.