Safaricom to invest $593mil to Launch Ethiopian Operations.

November 17, 2021

According to Ethiopian Communication Agents, Kenyan telco Safaricom plans to invest KES67 billion (USD593 million) in start-up costs for its Ethiopian affiliate, Safaricom Telecommunications Ethiopia. Through the Global Partnership for Ethiopia (GPE) consortium, the telecom maintains a 55.7 percent ownership in the new entrant, with other partners including its parent firm Vodacom Group, Japan’s Sumitomo Corporation, and the CDC Group, which is owned by the UK government. Safaricom Telecommunications Ethiopia received its license in July this year and is slated to begin commercial operations in mid-2022, according to TeleGeography’s GlobalComms Database. In addition to the start-up funds, Safaricom’s CEO Peter Ndegwa was quoted as saying that the operator anticipated CAPEX of between USD1.5 billion and USD2 billion over the next five years to meet the coverage obligations of its license. Regarding the operations, the official said: ‘Together with our partners we have availed funding to support this new venture, which we anticipate to break even by year four of operations. Our break-even target may be significantly impacted by the impact of the current conflict on the launch of operations, which we target by mid-2022.’ However, if Ethiopian announcements are to be believed, the second telecoms provider is expected to begin operations in the first quarter of next year. According to reports, the government is finalizing legislation reforms that will allow the central bank to award Safaricom a license for mobile banking services, which was not included in the initial license. The sale of a 40% stake in state-owned Ethio Telecom is now underway, and another mobile operator license is expected to be awarded soon.

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