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Safaricom consortium starts operations in Ethiopia

Business

By Dominic Omondi | Aug 29, 2022

A Safaricom-led consortium has officially begun commercial operations in Ethiopia with a large-scale customer pilot of its network in eastern Ethiopia.

The rollout of the network in the city of Dire Dawa sets the stage for the deployment of services across the Horn of Africa country.

In a statement yesterday, Safaricom Ethiopia said the pilot was part of a phased city-by-city regional network rollout that will see the telco reach 25 cities by April 2023.

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The market took the news with excitement, with the Safaricom share price at the Nairobi Securities Exchange gaining by 0.89 per cent to close at Sh28.30.

The pilot in Dire Dawa, the statement noted, will be on 2G, 3G and 4G and customers will able to purchase SIM cards and choose their preferred numbers of Safaricom Ethiopia's 07 prefix.

"This is an important milestone we begin opening the network to customers in order to test the end-to-end readiness of technical and commercial operations ahead of full network launch," said Safaricom Ethiopia Chief Executive Anwar Soussa.

"We will continue to share updates, as we extend the network and customer pilot across other regions, towards our national launch in October 2022."

Safaricom was to start commercial operations in April, but this has since been pushed back to August.

The Safaricom Ethiopia SIM cards will available in the branded shops or 'souks' and will come with welcome offer of data, voice and SMS for customers to test and experience the network for one month.

"In addition to the welcome package, customers will also be able to actively purchase airtime vouchers from branded shops or souks to recharge their airtime balance to continue using services on the network."

In the meantime, Safaricom has been recruiting 500 staff, of which 320 are Ethiopians, in preparation for the switch-on process.

The company evacuated its employees from the Horn of Africa country in November last year because of civil war but resumed work in early January.

In April, Safaricom reached an agreement with Ethio Telecom, the only telco currently operating in the market of over 115 million people, to share cell sites, interconnection and tower assets.

Since the granting of the licence in July 2021, the company has invested in its network and building infrastructure, including its own mobile radio towers, national transmission network and wholesale agreements for international connectivity.

The consortium-which also includes Vodacom and Vodafone-was in May last year granted a telecommunication licence in Ethiopia following a Sh95.3 billion ($850 million) bid.

The Global Partnership for Ethiopia consortium also brings together Sumitomo Corporation and CDC Group. The companies are from Kenya, South Africa, Japan and the United Kingdom.

Mr Soussa, appointed the managing director to lead the setting up of the operations, is to report to the board of Safaricom Telecommunications Ethiopia and Safaricom Chief Executive Peter Ndegwa.

The Ethiopia market had largely been closed to external investors but started relaxing the stance in 2019 through an economic reform agenda, with the support of the International Finance Corporation.

The government has embarked on liberalising the economy with reforms such as granting licences to foreign mobile network operators and sale of a stake in Ethio Telecom seen as the initial steps.

Safaricom is also keen to make incursion into the mobile money market in Ethiopia, which is yet to be opened up to foreign investors.

Safaricom is the most profitable company in the region and with its entry into Ethiopia, it hopes to extend its operations to other countries.