Ethiopia: Safaricom services will be available to 25% of the population by April 2023

In depth
This article is part of the dossier: Digital Africa

By Fred Harter
Posted on Thursday, 7 July 2022 17:10

An investor briefing at Safaricom's headquarters in Nairobi, Kenya. REUTERS/Baz Ratner

Kenyan telecoms provider Safaricom will launch its Ethiopian network in the north-eastern city of Dire Dawa in August, the first stage of a phased national roll-out that will include 24 other sites by April 2023.

The staggered launch will make Safaricom’s services available to 25% of Ethiopia’s 110 million-strong population by the end of the financial year, according to Matthew Harrison-Harvey, Safaricom Ethiopia’s chief external affairs and regulatory officer.

“Of course we want to achieve more than that, and that’s what we’re focusing on,” Matthew Harrison-Harvey told reporters in Addis Ababa. “We are starting in Dire Dawa because that’s the closest place to being ready, and then we will be opening in other cities including Addis Ababa in the next few months.”

Safaricom’s goal is for its network to cover the entire country.

Foreign investment

In May 2021, a consortium led by Kenya’s Safaricom paid $850m for the first ever license to operate private telecom services in Ethiopia, the world’s last great underserved market. Plans to sell a second license were shelved amid economic uncertainty stemming from the country’s civil conflict with the northern Tigray region.

Ethiopia is currently served by a single state-provider, Ethio Telecom, which previously held a monopoly on all phone and internet services.

Safaricom’s license runs for 15 years, and the company is expected to spend $8bn in Ethiopia, the country’s largest single foreign direct investment. It had been due to start commercial operations earlier this year, but Harrison-Harvey cited challenges involving importing technology and gaining access to land for its communication towers that hampered its launch.

“People want a quality digital service, that’s why it’s taken us a little time. We’ve been building strong foundations,” said Harrison-Harvey. “When we come, we ask for your patience because the services will be new, but we’re confident about the quality.”

Harrison-Harvey said Safaricom now has much of its infrastructure in place, including two data centres and a customer call centre, but initially the company will have to share Ethio Telecom’s communication towers while it builds thousands of its own.

Monopoly legacy

Ethiopia has one of the region’s lowest mobile phone penetration rates, the legacy of a sector dominated by a single state monopoly. Safaricom’s entry into the market is expected to bring down prices, but it has not yet received permission to launch its mobile-money service, M-PESA, in Ethiopia, owing to a law that currently bans foreign companies from offering the service.

“Our vision is to connect people to digital services, whether it’s to the internet to get information or to communicate with their friends and loved ones […] or increase financial inclusion through mobile money,” said Harrison-Harvey, adding that Safaricom would create “loads” of jobs through distribution partnerships.

At an event in Addis Ababa on Thursday 7 July, two Safaricom employees demonstrated that phones connected to the company’s network are already able to call each other. They are still unable to call phones with Ethiotelcom SIM cards, however.

Large parts of Ethiopia have been subject to phone and internet shutdowns in recent years as the country grapples with conflict and instability in multiple regions. They include Tigray, which has been cut off from the rest of Ethiopia since June last year.

Harrison-Harvey said that Safaricom would comply with any government requests to turn off parts of its network. “It’s a very important issue. It’s also a very sensitive issue,” he said. “If we are asked to do something like that, our license involves obligations to comply with national security, like any other country in the world …[and] we would ensure it is done in accordance with the laws of the country.”

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