Safaricom, a Kenyan mobile network operator headquartered in Nairobi. is on the verge of becoming the first foreign company to launch mobile money services in Ethiopia four months after the government promised to approve its operations by issuing a license.
The presence of M-Pesa mobile money transfer service in Ethiopia would expand and solidify Safericom’s fort in one of Africa’s most impressive and profit-laden economies.
According to BusinessToday, Aanwar Soussa, CEO of Safaricom Telecommunications Ethiopia PLC, said Safaricom Ethiopia is putting the finishing touches on launching M-Pesa in the Horn of Africa market in April 2023. He said, “We are finalizing our commercial and technical readiness, and we expect to launch operations within the upcoming financial year.”
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On October 6, 2022, Safaricom Ethiopia kicked off its activities for the mobile telecommunications network and services in Addis Ababa, the Ethiopian capital. The financial year of the country runs from April to March.
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“Our growth trajectory is even more exciting for us as we look forward to offering financial services through M-PESA,” Mr Soussa said at the Safaricom Investors Day event in Nairobi today.
He added, “With a population of approximately 120 million people and financial inclusion at about 35%, 57% 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.”
Safaricom’s History and Growth in Ethiopia
Safaricom, which started as a department of Kenya Posts & Telecommunications Corporation, the former monopoly operator, launched operations in 1993 based on an analogue ETACS network and was upgraded to GSM in 1996 (license awarded in 1999).
Safaricom was incorporated on April 1997 as a private limited liability company. It was converted into a public company with limited liability on 16 May 2002.
Following the Kenyan government’s policy of divesting its ownership in public enterprises, the Government of Kenya, through the Treasury Department, on 28 March 2008, made 10,000,000,000 of the existing ordinary shares of par value to the public Ksh 0.05 each of the Company.
This represents 25% of Safaricom’s total issued share capital from the Government of Kenya’s shareholding in Safaricom Limited.
As of 31st March 2009, the company had 6.175 million registered users, a customer base of 13.36 million, 8,650 retail outlets countrywide, 51 Paybill partners, and 301 3G-enabled base stations in Nairobi, Mombassa, Naivasha & Eldoret. Safaricom offers mobile telecommunication services through five product segments – Simu ya jamii, M-PESA, Prepaid, Postpaid, Business and Enterprise, International Roaming, and Data and Messaging.
M-PESA is a Safaricom product that allows users to transfer money using a mobile phone. Kenya is the first country in the world to use this service, which is offered in partnership between Safaricom and Vodafone. M-PESA is available to the public, even if they do not have a bank account or card.
Safaricom has recorded significant growth in its autonomy in the mobile money market through M-Pesa. It has grown to a staggering 99.9% in Kenya. The Central Bank of Kenya’s compiled data reveals that M-Pesa has increased the value of mobile money transactions.
In the last three years, it has hit Ksh2.206 trillion (99.9 per cent) of the total Ksh2.208 trillion worth of transactions in 2021. Mr Anwar further emphasized that Safaricom Telecommunications Ethopia PLC had reached close to 10% of the population, which translates to over 11 million people, had 847 network sites in 25 cities, and had onboarded 28,000 retailers, 103 distributor shops, and 5,000 acquisition agents.
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