After a successful bid for Ethiopia’s telecom licence, Kenya’s largest telco, Safaricom, has formally sent its inquiries with the intent of bagging an additional licence for the provision of mobile money services in the country.
Safaricom CEO Peter Ndegwa has informed investors that the company already wrote to Ethiopia’s telecommunications regulator seeking clarification on conditions as well as the additional fees required to obtain the additional licence.
“The letter has gone in. We are currently awaiting response from the Ethiopian authorities,” said Peter Ndegwa.
“Our understanding is we will be allowed to operate mobile money, but there are certain conditions that the government will be confirming to us including potentially some additional fee.”
Safaricom won the bid to enter Ethiopian market under the Global Partnership for Ethiopia in May, beating MTN Group Limited, which is headquarted in Johannesburg, South Africa.
The Global Partnership for Ethiopia entails Safaricom, Vodacom Group Ltd (South Africa), Vodafone Group PLC (UK), CDC Group PLC (UK) and Sumitomo Corporation (Japan).
The consortium received its operating licence on Tuesday and will officially start its operations next year.
It is expected to invest over Ksh64 billion in ten years, making it the largest foreign development investment in Ethiopia’s history.
Prior to sending out the invitation for the telecom licence bid, Ethiopia announced that a mobile money operation was not part of the licence, and that operators would not be allowed for at ĺeast three years.
The country’s only Telco, Ethiotel, launched mobile money services in the country this May, with the country’s Prime Minister Abiy Ahmed saying the service would be open to other telcos within a year.
As a confirmation, the Ethiopian Communications Authority has already invited proposals for the third licence.
It is expected that Safaricom’s entry into the Ethiopian market will create over 1.5 million new job opportunities for its citizens.
Ethiopia is home to over 112 million people, making it the second-largest country in Africa by population. It is one of the last countries in the world to introduce competition in the telecom industry, a rigorous process started by the government in 2019 as part of its Economic Reform Agenda, with the support of the International Finance Corporation. The reforms aim to increase jobs, reduce poverty and grow the local economy in an inclusive and sustainable manner.