Safaricom has revealed how it has structured its market entry strategy currently into the government owned Ethio Telecom after securing telco licence.
An international consortium named the Global Partnership for Ethiopia, which is led by Safaricom Plc, was on Saturday awarded a telecommunication licence to operate telecom services in Ethiopia.
The telco says it seeks to leverage on its M-pesa success in Kenya to gain a foothold in the Ethiopian market.
“The new licence does not allow us to export our revolutionary money transfer platform M-pesa yet but we hope that Addis would allow rollout of the service at a later date,” said the telco.
Safaricom plans to roll out data, voice and SMS in Ethiopia next year after the Ethiopian government promised to review its laws on mobile money transfers.
“The government has made commitment about some of the measures they will take to ensure the market allows shareholders to repatriate their profits but to also access their currency. But we believe by the time we need to repatriate dividends there will be sufficient reforms,” said the firm.
Further, Safaricom has formed Vodafamily Ethiopia Holding Company, a firm incorporated in England and in which the local outfit holds a 90 per cent stake.
The SPV Company which other shareholders include Vodacom International Limited (10 per cent) and a single share by Vodafone International Operations is expected to move to Kenya under the name Safaricomfamily Ethiopia Holding Company Limited.
The SPV will hold a 61.9 per cent stake in the Global Partnership for Ethiopia B.V. (GPE), an entity domiciled in the Netherlands.
Other shareholders in the entity include the Japanes Sumitomo Corporation and CDC Group Plc (both have been joint parties to Ethiopia’s license winning bid).
Safaricom Plc, a partner member of the Vodafone Group, is to establish a new operating company in Ethiopia which aims to start providing telecommunications services from 2022.
The impact investment consortium aspires to support Ethiopia’s digital transformation and positively enhance the lives of its citizens.
The reforms aim to increase jobs, reduce poverty and grow the local economy in an inclusive and sustainable manner.
The Global Partnership for Ethiopia was created to bring about transformational economic and social impact in the country.
The provision of accessible, affordable and high quality mobile and internet connectivity by the Partnership will enable greater social inclusion as millions more Ethiopians access quality telecom services.
Increased connectivity in Ethiopia will also boost the economy, impacting over 1 million jobs with digital training and skills, and bringing about productivity improvements for countless micro-entrepreneurs and small and medium sized enterprises.
Peter Ndegwa, CEO of Safaricom, said: “We are excited for the opportunity to work with the people of Ethiopia to set up telecom networks to deliver a digital lifestyle. In past years, we have seen the power of digital transformation and its impact on our customers. We believe by working with all stakeholders in Ethiopia, we can deliver a similar transformation while achieving a sustainable return to our shareholders.”