Safaricom PLC is planning to extend its reach into Ethiopia, Kenya’s northern neighbour.
Although not initially successful with its first few attempts, new changes within the Ethiopian government may prove beneficial for the mobile carrier to finally establish a presence within the country.
Last month, the Ethiopian government said that it would be impossible for Safaricom’s M-PESA service to have any space in the market. The Ethiopian central bank about reiterated that no foreign financial institutions would be allowed to offer mobile money services in the country.
Now, the good news for Safaricom is that the company was recently offered a window to buy into Ethio Telecom, the country’s mass-monopoly provider whose privatisation process is currently underway. This is one opportunity that Safaricom has been waiting on and one that might grant access to a licence in an economy with more than 100-million people.
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The Ethiopian Telecommunication Authority (ECA) issued a statement last week announcing that the country would now be open to selling a 40% stake in the state-owned company. In response to this announcement, Safaricom and, its parent company, Vodacom both expressed their interest in buying a stake in Ethio Telecom.
In an interview with Daily Nation, Peter Ndegwa, the CEO of Safaricom, states that he would continue to pursue ways to introduce the company’s data, M-PESA and geographical expansion to Ethiopia as part of his strategy to take the Africa-wide telecom to the next level of growth.
Gadgets Africa reports that the ECA called on, not just, Safaricom but any other foreign company to show interest in the acquisition of the stake that will lead to the issue of two nation-wide full-service telecommunication licences.
“The launch of the Expression of Interest (EOI) represents a significant milestone and a major development in the liberalisation of Ethiopia’s telecommunications market,” the statement reads.
This launch will mean the end of the Ethiopian State’s monopoly that has now lasted for nearly a century. A number of other African firms and telecoms like MTN, Orange and Airtel have also expressed interest in access to Ethiopia’s fast-growing mobile phone services market, and millions of prospective customers.
Edited by Luis Monzon
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