Safaricom (NSE: SCOM) Telecommunications Ethiopia, a name synonymous with innovation and connectivity, has achieved yet another milestone. In a groundbreaking move, the company was officially granted the license to operate mobile money services in Ethiopia on 11 May 2023.
This monumental achievement came a mere seven months after the commercial launch of GSM services, opening the door to a new era of financial empowerment and inclusivity in the country.
Unlocking the Power of M-PESA
The granted M-PESA license represents a pivotal moment for Ethiopia, heralding its integration into the world’s largest mobile payment system.
This strategic alliance between Safaricom and the Ethiopian landscape not only marks the introduction of Africa’s largest FinTech but also establishes Ethiopia as the first-ever recipient of the world’s original mobile money transfer system.
A Milestone in Financial Inclusion
Peter Ndegwa, Safaricom PLC CEO, exudes enthusiasm as he discusses this landmark achievement: “We are excited that this is a great milestone following our entry into Ethiopia. This positions us to provide essential financial services to the Ethiopian population. We are looking forward to launching and rolling out the service over the next few months.”
The introduction of M-PESA is poised to revolutionize Ethiopia’s financial landscape, mirroring its trailblazing impact on Kenya’s financial inclusion.
In Kenya, M-PESA propelled financial inclusion to an impressive 84% from a modest 26.7% in 2006, according to the 2021 FinAccess Survey.
This incredible achievement not only expanded access to financial services but also generated an impressive KES 117.2 billion ($886 million) in revenue during the fiscal year 2022/2023.
Safaricom is committed to progress. The company has already welcomed nearly 3 million customers to the Ethiopian market. It also boasts a robust distributor network of more than 114 outlets and an award-winning premium quality network across 22 cities and regions. The impressive network is supported by close to 1300 network sites and an operational staff of over 900, of which 81% are Ethiopians.
Strong Performance Despite Challenges
In a recent announcement of Full Year 2022/2023 results, Mr. Ndegwa highlighted Safaricom Kenya’s solid performance. Despite the challenges posed by the election year and economic headwinds, the company managed to increase net income by 3.0% to KES 74.5 billion.
The Safaricom Group as a whole recorded a 5.2% increase in Group Service Revenue, reaching KES 295.7 billion. Although the Group net income excluding minority interest experienced a decline of 10.6%, this was attributed to anticipated start-up costs and investments related to Ethiopia’s operations.
Notable figures include a 2.6% decline in voice service revenue, an 11.4% increase in mobile data revenue, and an 8.8% growth in M-PESA revenue, reaching KES 117.2 billion.
A Glimpse into the Future
Mr. Ndegwa’s outlook for the future is optimistic, highlighting the company’s positioning to cater to customer needs and provide technology solutions. He emphasizes the importance of solid planning, understanding business outcomes, and aligning strategies with the evolving technological landscape.
As Safaricom and Ethiopia embark on this transformative journey, the stage is set for Ethiopia’s financial inclusion and technological evolution. The synergy between Safaricom and Ethiopia promises to redefine financial accessibility, ushering in an era of growth and prosperity driven by the power of connectivity.
Key Highlights – Safaricom Group (Including Ethiopia)
- Service Revenue increased by 5.2% to KES 295.7 billion.
- Voice revenue experienced a decline of 2.6%, amounting to KES 81.1 billion.
- M-PESA revenue surged by 8.8%, reaching KES 117.2 billion.
- Mobile data revenue witnessed an impressive growth of 11.4%, totaling KES 54.0 billion.
- Total customer base expanded by 8.1%, reaching 45.9 million.
- One-month active M-PESA customers grew by 5.2% to 32.1 million.
- One-month active mobile data customers increased by 7.0% to 26.1 million.
As Safaricom Telecommunications Ethiopia embarks on this groundbreaking journey, it not only enhances its own growth trajectory but also contributes to Ethiopia’s economic empowerment and financial inclusion.
The union of Safaricom and Ethiopia’s aspirations for a connected and inclusive future is a testament to the power of innovation and collaboration.
