The Safaricom Ethiopia story started a long time ago. The Ethiopia bid was a tough one and involved a lot of telecom companies, but Safaricom was picked in the long run. It took a long time to examine, and following a higher investment over rivals (it reportedly bid $850 million), Safaricom, which was supported by other partners (Vodacom Group, Sumitomo Corporation, and CDC Group) named Global Partnership for Ethiopia (GPE), was finally given a go-ahead to launch in Ethiopia.
This happened in May 2021.
Towards the end of 2021, Safaricom Ethiopia started hiring staff as it planned a commercial launch. While it managed to secure a lot of workers from its native country, some of the staff were also selected from Kenya.
At the start of the year, it was revealed that the telco was building a $100 million data centre in the country. So far, it has managed to erect two of such facilities in Ethiopia.
Also, let’s remember that Safaricom’s upper hand is in mobile money services, aka M-PESA. Back in April 2020, Ethiopia killed Safaricom’s M-PESA launch prospects. Ethiopia strictly limited the launch of mobile money products and services to local organizations, effectively kicking out any prospects of M-PESA.
However, the decision to limit the launch of a mobile money product internally has since been abandoned following Ethiopia’s announcement that it would allow foreign companies to take part in the exercise. Safaricom is in the process of finalizing its access to the mobile money license (it has already acquired it), which we expect should go live sometime in 2023.
M-PESA, however, will not be the sole product in Ethiopia because state-owned Ethio Telecom has a similar service named Telebirr, which was launched in Q2. It has since attracted some popularity, with more than 4 million subscribers subscribing to it a few days after launch.
READ MORE: TRACKING SAFARICOM’S DEVELOPMENTS IN ETHIOPIA
With all these developments, Safaricom switched its network in the country at the end of August this year. The network first went live in the city of Dire Dawa. Customers had access to Safaricom Ethiopia’s 2G, 3G, and 4G coverage. The customers could also purchase Safaricom SIM cards and choose their preferred number starting with the 07 prefixes.
A few days later, the network was expanded to another city. Later, the network was expanded to three cities.
A month later, the network was available in 11 cities. This paved the way for the commercial launch of the service in Ethiopia, which was done in October (a two-month delay).
The Numbers
With the above introduction out of the way, how has the company faired so far? This is an important question because the Ethiopian arm was included during the last financial reporting when Safaricom staged the Investor Conference in Nairobi for the first six months of FY23.
“Safaricom Ethiopia commenced the phased commercial launch of its network and services, starting with a city-by-city customer pilot phase (providing national and international voice, data, and internet services to customers) across the country to conduct rigorous tests to ensure the provision of quality services,” said Safaricom CEO Peter Ndegwa.
The telco has since launched the following products in Ethiopia:
- Prepay products- Data, Voice, SMS
- Digital EKYC process
- Outsourced call centre – over 500 agents
- Branded range of Safaricom devices – 2G, 4G feature phones, 4G smartphones
- PostPay, VAS products, and digital products on the roadmap
The carrier also has 561 active 2G/3G/4G sites, 2 data centres, 931 sites under construction, and 49 shared sites.
Furthermore, 61 of the total sites are shared, having signed all tower-sharing agreements.
The said staff includes 479 Ethiopians and 176 ex-pats, making them 655.
There are 66 distributor shops, 2000 sim-selling shops, and 652 call centre staff.
By September 30, Safaricom Ethiopia had onboarded 180K customers, who jumped to 740K at the end of October. As of this writing, Safaricom Ethiopia has more than 1 million customers.
Safaricom says it is committed to providing commercial services in 25 cities and meeting Safaricom Ethiopia’s License network coverage obligations (25% population) required by March 2023.
At the Investor Briefing, Safaricom reported that service revenue in H1 FY2 included KES 9.1M from Ethiopia, generated in the first month since the beginning of a phased network rollout plan in Ethiopia on 29 August 2022.
So far, it appears that Safaricom has a firm grasp in the Ethiopian market, which has for a long time been served by state-owned Ethio Telecom. Ethio Telecom has since invited private investors, and the country is willing to offer a third license to any successful bidder.
We will keep you updated on the progress made by Safaricom Ethiopia over the next couple of weeks.
