Safaricom Ethiopia in big market gain ahead of M-PESA launch

Safaricom is poised for better returns with fresh details that its subsidiary Safaricom Ethiopia network coverage has hit a potential customer base of 10 percent of the population or roughly 11 million people as the company readies to launch M-PESA services in the coming fiscal year.

Safaricom Ethiopia has been struggling since its launch, taking up huge capital expenditure with no profits to show. The subsidiary has rolled out 847 network sites in 25 cities, and onboarded 28,000 retailers, 103 distributor shops, and 5,000 acquisition agents, the CEO, Anwar Soussa said during Safaricom’s inaugural investor day forum in Nairobi.

Mr Soussa noted voice and data usage in the Ethiopian market is now averaging 64 minutes and 1.9GB respectively per customer in a month.

“With a population of approximately 120 million people and financial inclusion at about 35 percent, 57 percent mobile penetration, and annual inward remittance of about $4.2 billion, Ethiopia offers a great opportunity to grow the business to the Kenya level in 10 years,” said Anwar Soussa.

“Our growth trajectory is even more exciting for us as we look forward to offering financial services through M-PESA. We are finalizing our commercial and technical readiness and we expect to launch operations within the upcoming financial year,” he added.

Read also: Safaricom Ethiopia telcom signal goes live in Addis Ababa

In its half-year update, Safaricom Ethiopia reported it incurred total costs of $48.87 million against $806,398 revenues recorded in the trading period that ended September 2022. Overall, Safaricom’s net profit in the six months dropped to $248 million, attributable to huge capital expenditure in the Ethiopian unit.

Safaricom’s investor forum is part of the telco’s plans to engage with its business partners and stakeholders about its operations, strategies, and impact in the community.

Themed Driving Purpose-Led Growth, the forum brought together investors, analysts, and regulators including representation from the Nairobi Securities Exchange and the Capital Markets Authority.

Safaricom engaged the stakeholders on the firm’s sustainable business and social impact, financial services, big data, technology, and enterprise business opportunities for both private and public sector.

Safaricom CEO Peter Ndegwa said, “We are excited to host our first-ever investors’ day. … We believe that our commitment to purpose-led growth will not only create long-term value for our shareholders, but also good for our customers and the communities we serve. As we delved deeper into our purpose commitments and our journey to date, we affirmed our belief in meeting our targets”.

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