Safaricom, a leading Kenyan telecommunication platform, has announced that it has officially begun operations in Ethiopia, becoming the country’s first private operator.
In a statement released by the company, Safaricom switched on its digital communication network and services in Addis Ababa on Thursday, October 6, following network pilots in 10 cities along with a 2-month phased launch across the country.
Prior to this development, the Ethiopian telecommunication market, which is one of the largest in Africa, was dominated by state-owned Ethio Telecom, which operated as a monopoly with 54 million subscribers in the country.
With Safaricom Ethiopia’s 2G, 3G, and 4G networks now available in a total of 11 states across the country, the company plans to provide strong competition against Ethio Telecom with the aim of covering an additional 14 cities by April 2023 to enable it to meet the 25% population coverage obligation in its license.
“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 Peter Ndegwa, CEO of Safaricom.
“We have deepened digital and financial inclusion in Kenya by connecting people to people, people to opportunities, and people to information. With these lessons and experiences, we look forward to positively impacting the people of Ethiopia with a sustainable and quality mobile network that will be a vital launch pad for nationwide digital telecommunications services to over 118 million Ethiopians,” he said.
Ethiopia’s finance minister, Ahmed Shide, stated hours after the announcement that his government had granted Safaricom a license to operate a mobile money service. The company acknowledged this but stated it will take a few months for the service to be fully rolled out.
Safaricom has operated as a monopoly in the Kenyan telecom sector, and this development will be the company’s first international expansion. With the licensing of its infamous mobile money service, M-Pesa, the company will be looking to provide a good telecommunication experience for the unbanked, which comprises of approximately 60% of Ethiopia’s population.
The Ethiopian government only permitted locally-owned non-financial institutions to carry out mobile money services but passed a bill in April to allow foreign institutions operate in the country. M-Pesa will now compete with Ethio Telecom’s Telebir, and for Kenyan president William Ruto, the deal is a big win for the organization.