This archive report was first published on 11 October 2019.
On October 11, 2019, Safaricom's interim CEO, Michael Joseph, announced that the company was considering buying a stake in Ethiopia's state-owned telco, Ethio Telecom, or setting up its own operations in the country.
According to Joseph, Safaricom is looking at all options, including buying a stake in Ethio Telecom or seeking a license to start operations in the country.
Ethiopia's state-owned telco, Ethio Telecom, has announced plans to sell shares through a privatization plan, which has attracted the attention of several global telecom firms, including Vodafone, MTN, Orange, Etisalat, and Zain.
Safaricom's interest in Ethio Telecom is driven by the country's fast-growing mobile market, with a subscriber base of 44 million, making it the biggest single-country customer base of any operator in Africa.
Kenya's 52.2 million mobile phone subscribers give it a penetration of 109.2 percent, while Ethiopia's 100 million population offers a penetration of 44 percent.
From a cash perspective, a deal for Ethio Telecom will not be difficult for Safaricom, which is cash-rich, with Sh20 billion at the end of March, up from Sh9.3 billion in a similar period a year earlier.
Financial analyst George Bodo believes that buying Ethio Telecom is the best investment Safaricom can make, as it can use the firm as a platform to launch mobile money services, which have huge potential in Ethiopia.
Mobile money services, such as M-Pesa, have transformed Kenya's economy by allowing people to sidestep a rickety and inefficient banking system and send each other money and make payments at the touch of a button.
