Safaricom confirms commercial launch in Ethiopia this year

Safaricom (NSE: SCOM) is set to launch commercial operations in Ethiopia within this year as part of the company’s regional expansion efforts to provide world-class telecommunication services to over 112 million Ethiopians.

In readiness for the commercial launch, Safaricom Ethiopia has recruited a team of over 300 staff, of which 50% is local talent, with plans of reaching 1,000 in the next financial year. The business also has on boarded distributors; secured four retail shop locations and set up the first outsourced call center in Addis Abeba.

Safaricom Ethiopia has secured approvals for towers development, built two data centers, made the first test call, sent out the first test SMS and completed the first data session.

“We have made significant progress towards a commercial launch. We are engaging with the Ethiopian Communications Authority and other relevant partners about the requirements for ensuring a commercial launch this year,” Mr. Peter Ndegwa said during the announcement of the full year 2021/2022 results on 12th May which saw net income increase by 5.4% to 72.35 billion Kenyan Shilling (KES) for Safaricom Kenya and declined 1.7% to KES 67.50 billion including the impact of KES 4.66 billion financing costs for the Ethiopia business.

Mr. Ndegwa said Safaricom Ethiopia plans to bring mobile financial services to Ethiopia. However, this is subject to the licensing and regulatory process by the government of Ethiopia.

Safaricom increased its service revenue by 12.3% to KES 281.11 billion and Earnings before Interest and Tax (EBIT) by 13.5% to KES 109.13 billion. Voice service revenue grew by 0.8% to KES 83.21 billion; mobile data revenue grew by 8.1% to KES 48.44 billion, while M-PESA revenue grew by 30.3% to KES 107.69 billion.

Mr. Ndegwa said: “Our strong growth and achievements this financial year are due to the strong strategy execution, a dedicated staff force, and the business commitment to prioritize the needs of our customers. We will continue to be a sustainable purpose-led business as we transition to become a technology company by 2025.”