Safaricom users in Ethiopia tick up
Safaricom now has 9 million total mobile customers in Ethiopia, more than a year since launching operations in the country. About a third of those customers use its mobile financial services platform, M-Pesa.
Safaricom CEO Peter Ndegwa shared an update on the Ethiopian business this week and said the company had 4.3 million 90-day active customers at the end of December 2023.
Up until 2021, only state-owned Ethio Telecom was offering telecom services in the country.
A consortium led by Kenyan-based Safaricom was awarded a telecoms license in May 2021, ending one of the world's last standing telecoms monopolies.
Safaricom Ethiopia began rolling out its network in August 2022 in the city of Dire Dawa in the eastern part of the country. In October 2022, it officially launched its national network in the capital, Addis Ababa, and ten other cities.
In its first nine months in operation, Safaricom Ethiopia gained 4.5 million gross customers and had doubled that by the end of 2023.
"We have made significant progress in expanding network roll-out and the great momentum M-Pesa has gained since switching on M-Pesa services on August 15, 2023," Ndegwa said.
Ndegwa claimed that Safaricom had established the fastest data network in Ethiopia and the overall network now covers 33% of the population and is on track to meet all its license coverage obligations.
"Mobile data is a key proposition in Ethiopia with usage per chargeable mobile data subscriber now at 4.76GB as at the end of Q3. We are encouraged by this momentum in usage levels, which has now surpassed Kenya," the CEO said.
Safaricom Ethiopia reported total revenue of 4.8 billion Kenyan shillings (US$30 million) in the first nine months of the financial year and of this, M-Pesa generated just KES44.9 million ($280,000) in revenue. Mobile data revenue contributed KES2.5 billion ($15.6 million) for the nine months.
By the end of 2023, Safaricom had launched 2,242 basestations in Ethiopia, covering 33 cities and towns.
"Our focus now is to densify connectivity to continue enhancing quality of connectivity as we create a contiguous network," Safaricom said.
The group's capex guidance for Ethiopia remains between KES40 billion and KES45 billion ($250 million and 280 million) for the 2024 financial year.
M-Pesa grows but faces stiff competition
Safaricom was granted a license to operate mobile money services in Ethiopia in May 2023 and launched M-Pesa services in August 2023.
After just four and a half months, Safaricom had 3.1 million M-Pesa users in Ethiopia, 26,200 M-Pesa agents and 43,100 merchants signed up to the platform.
However, the operator faces significant competition from state-owned Ethio Telecom, which reported it had 41 million customers on its mobile money platform, Telebirr, at the end of 2023. Telebirr has over 145,900 agents and 143,600 merchants on its platform.
Safaricom said it expects its M-Pesa numbers will continue to grow as its network expands, adding that M-Pesa services are now interoperable with nine local banks.
"We are very pleased with the optimism that M-Pesa has evoked in the youthful population of Ethiopia, and we look forward with great excitement to the transformation M-Pesa will bring to financial inclusion in Ethiopia," Ndegwa said.
However, there are some headwinds to face, including high inflation and the depreciation of the Ethiopian Birr over the past year.
Safaricom also faces another operator coming into the current duopoly as the Ethiopian government is actively looking for another international operator to apply for an operating license in the Horn of Africa nation.
In January 2024, Safaricom investor Vodafone announced a deal with Microsoft that included scaling M-Pesa by housing it on Microsoft's cloud platform Azure and enabling the launch of new cloud-native applications.
- M-Pesa registers 1.2M customers in Ethiopia
- MWC Kigali: Safaricom CEO Peter Ndegwa on connectivity in Kenya
- Interview: Pedro Rabacal on building Safaricom's network in Ethiopia
*Top image is of Safaricom CEO Peter Ndegwa. (Source: Safaricom.)
— Paula Gilbert, Editor, Connecting Africa