In October 2022, Safaricom switched on its operation in Ethiopia introducing 2G, 3G and 4G services across 11 cities. A month later, the company has reported revenue and updates from its first commercial month in Ethiopia.
Let’s break that down:
Safaricom Ethiopia has signed up 740,000 customers in total. This is a significant growth in October, compared to September when the company had 180,000 customers in total.
Of all the sign ups, at least 20,000 of them use the network on a daily basis. These customers access both data and voice when using their lines. And Safaricom says the average use for the month of October sits at 711 MBs average usage per active data customer and 30 Minutes of Use per active voice customer.
In contrast to Kenya, during the 2019 Full Year results announcement, the average usage of data per month per customer was at over 700MB. The difference here is that Safaricom Kenya was taking into consideration all its customers, while the data above from Safaricom Ethiopia is only for the active data customers – whose total numbers we don’t have. Still impressive, nonetheless.
Ethiopia not only has a huge population at 115 million people, it also has a very large number of young people. Over 75 million people in the country are aged below 25 years. There’s also a high affinity of data usage, with the country enjoying 3.7 million monthly active TikTok users. This shows the huge potential for Safaricom Ethiopia – especially for the young population.
M-Pesa in Ethiopia:
The Ethiopian government has already issued Safaricom with a Mobile Financial Services license, which allows the company to expand M-Pesa services to the country.
For flow of money, Ethiopia relies on banks and ATMs. M-Pesa, should it receive good uptake, has a huge market opportunity here.
In the coming months, we should see Safaricom introduce M-Pesa services to Ethiopia. They will be hoping to take up a huge chunk of mobile money market share as they’ve done with Kenya.
Safaricom Ethiopia is currently operational in 16 cities. These include Addis Ababa, Debre Birhan, Gondar, Dire Dawa, Bishoftu and more. The company has 561 active 2G, 3G and 4G sites, plus 2 live data centres.
Safaricom’s network now reaches 7.5% of Ethiopia’s population. This represents around 8.5 million people covered so far. The company is targeting 25% coverage by April 2023. There are currently 931 more sites under construction.
In all these places, customers have been on-boarded with an end-to-end Know Your Customer process that includes finger-print biometrics. Safaricom says that early feedback from customers is positive on the quality of their network experience.
Safaricom Ethiopia Investment:
Safaricom PLC has invested over $598 Million (KES 72,896,200,000) in its Ethiopian operations. This investment has allowed the new Telco to be able to setup and run all the operations mentioned above, plus more.
In terms of workforce, Safaricom Ethiopia has a total workforce of 655 people with 176 of them being expatriates. 479 of the workforce are Ethiopians, including 47 graduate trainees.
Under sale and distribution, Safaricom Ethiopia currently has 66 distributor shops, 2,000 SIM selling outlets, and employs 652 call centre staff.
The company says it continues to explore other funding avenues as guided by business decisions and market conditions which include equity, Vendor financing, Development Finance Institutions (DFIs) and Commercial banks.
Safaricom is in discussions with IFC to partner as both a debt and equity funder given its global investment profile. However, Safaricom PLC will continue to hold majority stake in the Global Partnership for Ethiopia.