This archive report was first published on 11 October 2019.
Friday, October 11, 2019, marked a significant day for Safaricom, as the company's interim CEO, Michael Joseph, revealed plans to acquire a stake in Ethiopia's State-owned Ethio Telecom.
According to Joseph, Safaricom is exploring all options, including buying a stake in Ethio Telecom or seeking a licence to start operations in the country.
With a subscriber base of 44 million, Ethio Telecom is the largest single-country customer base of any operator in Africa, making it an attractive investment opportunity for Safaricom.
The Ethiopian government has announced plans to open up the country's telecoms market to foreign investment, and Safaricom is among several global telecom firms, including Vodafone, MTN, Orange, Etisalat, and Zain, that have expressed interest in gaining access to Ethiopia's fast-growing mobile market.
Acquiring a stake in Ethio Telecom would provide Safaricom with an easy solution compared to setting up its own operations, which could involve significant investment in infrastructure, staff, and marketing.
George Bodo, a financial analyst and director at Callstreet Investor Relations, believes that buying Ethio Telecom would be the best investment Safaricom can make, citing the potential for mobile money services, such as M-Pesa, to transform Ethiopia's economy.
With a cash-rich position, Safaricom's ability to access the Ethiopian market would be a significant boost to the company's growth prospects.
