Safaricom Ethiopia has attracted three million subscribers in less than six months after entering the Ethiopian market. According to Safaricom’s public relations manager Christopher Karanja, by mid-March 2023, Safaricom had 2.8 million subscribers in Ethiopia.
“As of mid-March, our customer base in the Ethiopian market stood at 2.8 million,” said Karanja on a growth that implies that the company has been getting over 16,000 new subscribers daily.
This growth in the number of subscribers follows a steady growth that has been recorded since the telecommunications firm entered into Ethiopia.
For instance, in the month of October 2022 when Safaricom officially launched its services in Ethiopia, the telco attracted 740,000 subscribers.
This saw the firm generate revenues of up to Sh. 98.3 million in that month alone. Less than two months later, in mid-November, Safaricom crossed the one million subscribers milestone.
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It is expected that Safaricom will soon launch mobile money transfer services in Ethiopia in what is expected to be a game changer. According to economic and financial analyst James Muiruri, the expected replication of the Safaricom success story in Ethiopia will see the birth of a Kenyan multinational on a grand scale.
“Ethiopia is largely an unexploited market. This is why Safaricom’s entry has happened at an optimal time. Once M-Pesa services are introduced in the country, you can expect that Safaricom Ethiopia to reach break-even point much sooner than previously expected,” says Muiruri. He adds that this is further supported by the growing numbers of voice and data subscribers.
Although it is expected that Safaricom Ethiopia will be as large as its Kenyan parent, Muiruri opines that this could be achieved much earlier, especially with the ongoing peace efforts that will enhance a more business friendly environment.
In the same vein, according to Lisa Kimathi, an investment analyst at Standard Investment Bank, Safaricom Ethiopia is expected to break even within the next three years starting from October 2022.
Initially after launching, Safaricom Ethiopia availed 2G, 3G, and 4G mobile services in 11 cities, including in the capital and the country’s second-largest city Dire Dawa. The company plans to launch services in a total of 25 cities by April 2023 to meet the 25 per cent population coverage obligation in its license.
“Safaricom Ethiopia is building a wholly-owned mobile network and also has infrastructure sharing and interconnection agreements in place. Safaricom Ethiopia’s vision is to transform lives through a digital future for all Ethiopians,” said Safaricom chief executive officer Peter Ndegwa.
When making its entry into Ethiopia, Safaricom invested over half a million dollars. Ndegwa notes that Safaricom invested over USD 598 million in Ethiopia operations.
Safaricom Ethiopia is owned by an international consortium including Safaricom PLC; Vodacom Group; Sumitomo Corporation – one of the largest international trading and business investment companies; and British International Investment (BII) – the UK’s development finance institution and impact investor.
According to Ndegwa, Safaricom is looking forward to positively impact the people of Ethiopia with a sustainable and quality mobile network that will be a vital launch pad for nationwide digital telecommunications services to over 118 million Ethiopians.
“For two decades, Safaricom PLC has combined the power of technology and our innovative spirit to solve customer and societal challenges. Led by our purpose to transform lives, we have deepened digital and financial inclusion by connecting people to people, people to opportunities, and people to information,” he added.
Muiruri says that with the budding signs of success from Safaricom Ethiopia, long term investors in the Safaricom shares at the Nairobi Securities Exchange should entrench their positions.
“The current low prices of the Safaricom stock presents very ripe opportunities to take position for long term investors. The Ethiopian entity is certainly going to transform Safaricom’s sustainability and profitability, which will in turn reflect on better earnings, dividends, and general market valuation,” he says.