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M-pesa to Begin Operations In Ethiopia in One Year

Safaricom Plc, Kenya’s telecommunication giant that runs M-Pesa, was on Saturday awarded a license to operate telecommunication services in Ethiopia in a consortium that comprises of its parent firms Vodafone and Vodacom, British development finance agency CDC Group and Japan’s Sumitomo Corporation.

The consortium which was dubbed “Global Partnership for Ethiopia”  was worth $850 million which the telecommunication giant won in the two licenses that were on offer in Ethiopia.

In a press briefing on Tuesday, Peter Ndegwa Safaricom CEO  shared more details about the expansion details into Ethiopia, saying Safaricom has a stake of 55.7% in the consortium. He added that United States Government-owned International Development Finance Corporation (DFC) has committed to support Safaricom in form debt.

“There is a real commitment from the Ethiopian Communications Authority and also from the government from Ethiopia, that they will facilitate an environment in which the new licensees will be allowed to operate in the right way and the right regulations will be put in place.” Safaricom CEO Peter Ndegwa.

Safaricom has expressed hope in the market currently boasting over 50 million mobile phone users. Peter Ndegwa said the telco is keen on creating a social-economic transformation that will deliver at least a million jobs created in the first few years of operation in Ethiopia and support three to four million small scale businesses.

M-pesa Services in Ethiopia

Early this month, Ethio Telecom launched a mobile money transfer service similar to M-Pesa dubbed telebirr, a move aimed at going ahead of  Safaricom’s M-Pesa.

According to the state-owned mobile phone operator, telebirr will mark a shift for Ethiopia, where the banking system is seen as inefficient with 19 commercial banks serving a population of about 115 million. The company aims to attract 21 million users for the service in its first year of operations, rising to 33 million in five years

However, commenting on the matter Peter Ndegwa said that although Ethio Telecom has a head start for voice and recently launched mobile money services, Safaricom and its partners have a wealth of experience through the M-Pesa brand in their respective spaces that up service delivery in the market.

“We are happy and delighted that the government has actually committed that the new licensees will be allowed to operate mobile money within a relatively short period of time which is one year,” Safaricom CEO Peter Ndegwa

Last year, the National Bank of Ethiopia issued a directive allowing residents and non-residents to open and operate foreign currency accounts in the country. The directive was one of many reforms in the country’s financial sector aimed at liberalizing the sector.

Speaking on Ethiopia’s policies on foreign currency repatriation, Peter Ndegwa said that it was an area that they were aware of during their deliberations with the state Authorities.