Addis Ababa, Ethiopia (21 March 2023)
Safaricom’s entry into Ethiopia’s telecommunications market has led to significant improvements in services and pricing for consumers, according to industry experts. The Kenyan telecoms giant launched its services in Ethiopia in October 2022, as part of a consortium which paid a combined $850 million as a license fee to operate in Ethiopia and plans to invest another $8 billion over the next decade.
As a result of the entry of new competition, the incumbent Ethio Telecom has been forced to improve its services and pricing, benefiting local businesses and entrepreneurs. For instance, mobile internet subscribers can now access unlimited mobile internet from Ethio Telecom for 999 birr (around $19) per month, compared to $100 a month five years ago.
Safaricom has deployed a modern network in Ethiopia, covering 27 cities and attracting 2.5 million subscribers. However, some business owners believe Safaricom has not met all their requirements yet. For example, the company does not offer an unlimited data package.
The Ethiopian government has delayed approving Safaricom’s launch of its mobile money transfer service M-Pesa, but the consortium is ready to launch as soon as they receive clarity on the $150 million licensing fee. Ethio Telecom has already been running its mobile money service, Telebirr, since 2021 and counts 27.2 million users, but the actual number of active users is difficult to estimate.
Despite the positive developments, concerns remain about Ethiopia’s business environment, which is reportedly not business-friendly and prone to corruption. The government has repeatedly shut down the internet during moments of political tension, which costs the Ethiopian economy some $8.3 million a day, according to the Center for Advancement of Rights and Democracy.
The government plans to announce its selection of a third telecoms operator this year and is reportedly looking to sell 45% of Ethio Telecom.
Source: Safaricom, Rest of World