Safaricom launches network in Ethiopia as first private operator

Kenya’s Safaricom (SCOM.NR) launched its mobile network in Ethiopia on Thursday, becoming the first private operator in one of Africa’s largest telecoms markets.

State-owned Ethio Telecom has until now enjoyed a monopoly in Ethiopia, Africa’s second-most populous country with an estimated 118 million people.

Safaricom Ethiopia switched on its network and services in the capital Addis Ababa on Thursday following network pilots in 10 cities, it said in a statement.

Hours later Ethiopia’s finance minister, Ahmed Shide, said his government had granted the company a licence to operate a mobile money service.

Safaricom Ethiopia CEO Anwar Soussa said the mobile money service would take two to three months to roll out.

Safaricom leads a consortium entering the market including South Africa’s Vodacom (VODJ.J) and Britain’s Vodafone (VOD.L).

Its network was supposed to launch in April but was delayed because of the coronavirus pandemic and logistical challenges.

Safaricom Ethiopia said it plans a national network rollout to reach 14 additional cities by April 2023.

“We are optimistic about how the technology and connectivity we are providing will contribute to a digital future and eventually transform people’s lives,” said Safaricom CEO Peter Ndegwa.

Kenyan President William Ruto, who attended the launch, said the mobile money licence had not been agreed when he departed from Nairobi, Kenya’s capital, on Thursday morning.

Ruto said he “had a mission to come back with a deal.”

Safaricom launched the world’s first-ever mobile phone-based money transfer service 15 years ago, and the business, known as M-Pesa, has evolved to account for roughly half of the company’s annual revenue.

The government announced plans to partially privatise Ethio Telecom after Prime Minister Abiy Ahmed took power in 2018 but said in March that it had decided to postpone the process, citing economic challenges.

Ethiopia’s telecoms industry is considered the big prize in Abiy’s push to liberalise the economy.

But Abiy’s efforts to open up the economy to investment have been damaged by a nearly two-year-long war in the northern region of Tigray, which has killed thousands and uprooted millions.

Abiy and Ruto were due to speak later on Thursday at Safaricom Ethiopia’s official launch ceremony in Addis Ababa.

Source: Reuters