Safaricom Ethiopia on a path to digital transformation

Telco giant Safaricom PLC says it is making significant strides in its expansion into Ethiopia, a frontier market where it launched operations in October 2022.

During the company’s second Investor Day in Addis Ababa, Safaricom showcased its achievements, future plans, and the progress of its operations in Ethiopia.

Themed “Scaling Operations for Ethiopia’s Digital Future,” the event brought together 150 attendees, including analysts, regulators, government representatives, Safaricom PLC Kenya and Ethiopia board members, and senior management.

Adil Khawaja, Board Chairman of Safaricom PLC, noted the company’s long-term commitment to Ethiopia, highlighting the country as a key growth market. He stated, “Ethiopia represents a key growth market for Safaricom PLC.

As we continue our journey of growth and transformation, I am confident that we will remain at the forefront of driving digital innovation and delivering exceptional value to our customers, shareholders, and the communities we serve.”

Safaricom Group CEO Peter Ndegwa echoed this sentiment, noting the success Safaricom Ethiopia has achieved in a relatively short span of time. He attributed this success to the company’s focus on scaling operations for Ethiopia’s digital future and its commitment to leveraging expertise and resources to establish itself as a key player in the Ethiopian telecommunications landscape.

Read also: IFC secures stake in Safaricom Ethiopia

Safaricom Ethiopia boasts 30 percent population coverage

As of December 31, 2023, Safaricom Ethiopia had over 2,200 base stations covering 33 cities, including large and medium towns, representing over 30 percent population coverage.

Additionally, M-PESA, Safaricom’s mobile money platform, already has over three million customers in Ethiopia and is experiencing rapid growth.

Michael Joseph, Chairman of the Safaricom Telecommunications Ethiopia Board, cited a number of opportunities for the company’s growth in Ethiopia. He underscored the company’s focus on innovation and delivering high-quality services, including reliable internet connectivity, to empower individuals, businesses, and communities across Ethiopia as critical in driving success.

Wim Vanhelleputte, CEO of Safaricom Telecommunications Ethiopia PLC, highlighted the remarkable progress the company has made since launching commercial operations in October 2022. He noted that the company is committed to establishing an innovative brand loved by customers and building a world-class network that delivers a superior customer experience.

Vanhelleputte also highlighted the potential of the region’s largest fintech platform M-PESA to transform financial inclusion in Ethiopia.

The Investor Day is part of Safaricom’s efforts to engage with its business partners and stakeholders on its operations, strategies, and impact.

This year’s edition in Addis Ababa follows a successful one in Nairobi in February 2023, demonstrating Safaricom’s commitment to transparency and stakeholder engagement in its expansion into Ethiopia.

Safaricom’s M-PESA revolution in Ethiopia

In May 2023, Safaricom was granted a license to operate mobile money services in Ethiopia. Just three months later, in August 2023, Safaricom launched its M-Pesa services in the country, marking a critical moment in the telco’s expansion efforts.

According to Safaricom’s Half-Year report for the period ending December 31, 2023, the company had already garnered an impressive 3.1 million M-PESA users in Ethiopia, with 26,200 M-PESA agents and 43,100 merchants signed up to the platform.

This rapid uptake underscores the strong demand for mobile money services in Ethiopia. However, Safaricom faces stiff competition from state-owned Ethio Telecom, which reported 41 million customers on its mobile money platform, Telebirr, by the end of 2023.

Despite this, Safaricom remains optimistic about the growth potential of M-PESA in Ethiopia, especially as its network expands. Safaricom’s M-Pesa services are now interoperable with nine local banks, further enhancing its appeal to customers.

One of the key drivers of M-Pesa’s growth in Ethiopia is the low level of financial inclusion in the country. According to the National Bank of Ethiopia (NBE), only 45 percent of the adult population in Ethiopia had an account at a financial institution in 2020.

This presents a major opportunity for Safaricom to expand its M-PESA services and drive financial inclusion in Ethiopia. Safaricom Ethiopia is owned by an international consortium that includes Vodafone Group, Safaricom PLC, Vodacom Group, Sumitomo Corporation, and British International Investment (BII), the UK’s development finance institution, and impact investor.

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