Safaricom determined to enter Ethiopian telecom market
Safaricom is determined to enter the Ethiopia market despite protectionism in the neighbouring country aimed at shielding its state corporations.
Ethiopia’s central bank recently said it would only allow locally-owned financial institutions to offer mobile money services, leaving Safaricom with a GSM (Global System for Mobile Communications) option only.
New directives have however opened the market for players in other sectors of the economy, CEO Peter Ndegwa said yesterday, which gives the telco a chance to bid for a license most likely to be done through a consortium.
“We will consider a partnership with other entities in Ethiopia,” Ndegwa said in a post investor briefing conference call.
The Nairobi Securities Exchange-listed telco yesterday reported a 19.5 per cent rise in earnings for the year ended March 31, where net profit closed at Sh74.70 billion.
This is up from Sh62.49 billion posted in a similar period last year.
During the period, service revenue grew 4.8 per cent to Sh251.22 billion up from Sh 239.77 billion last year.
The growth was mainly propelled by Voice and M-Pesa which accounted for 34.5 per cent and 33.6 per cent of the service revenues in the year.
M-Pesa revenue grew by 12.6 per cent to Sh84.44billion. Voice service revenue shrunk by 1.4 per cent to Sh94.45billion, but remained the biggest earner for the telco.
Messaging revenue also declined by 12.3 per cent to Sh17.19 billion. Mobile data revenue however increased by 12.1 per cent to Sh40.67 billion.
“We expect a drop in voice and SMS going forward as people shift more into data and applications such as WhatsApp,” Chief Financial Officer Sateesh Kamath said.
Safaricom is keen to tap into the 100 million population-Ethiopian market as part of its regional growth.
Yesterday, Ndegwa said the firm will be bidding for a general telecommunication license in a planned upcoming auction, which could, however, delay as a result of the Covid-19 pandemic.
