This archive report was first published on 4 November 2019.
Safaricom's Ambitious Plans for Ethiopia ¶
On November 4, 2019, Safaricom released its half-year 2020 interim results, showcasing a 14.4% growth in net profit to Ksh 35.65 billion. The company's service revenue grew by 5.3% to Ksh124.3 billion, attributed to the strong performance across M-Pesa and data segments.
Michael Joseph, Safaricom's interim CEO, expressed the company's eagerness to enter the Ethiopian market, citing its potential for growth and the opportunity to explore both telecommunications and financial services.
"Ethiopia is the last big prize in Africa in terms of telecommunications," Joseph noted in an exclusive interview with Kenyan Wallstreet. "Everybody who is a mobile operator in the world will be looking at this opportunity, including ourselves."
With the Ethiopian government liberalizing the telecoms sector, Safaricom sees an opportunity to tap into the country's growing mobile banking market. A study by Ethio Telecom estimates that mobile banking in Ethiopia could generate up to KSh1.34 trillion ($13 billion) by 2025.
As part of its expansion plans, Safaricom aims to roll out countrywide 4G coverage before the end of the year. The company also plans to launch new services on M-Pesa, its mobile money platform, to serve both businesses and individuals.
Joseph revealed that Safaricom is in talks with the Central Bank of Kenya to increase M-Pesa transaction limits, aligning operations with regulator's concerns such as funding terrorism, fraud, and money laundering.
The company is also in negotiations with Vodafone to bring the management of M-Pesa's G2 platform under a joint venture between Safaricom and Vodacom. This move could enable economies of scale and further expansion of M-Pesa across Africa.
Joseph, who led Safaricom between 2000 and 2010, is currently serving as the interim CEO following the demise of Bob Collymore. Under his tenure, Safaricom launched M-Pesa in 2007, which has since become the most successful mobile money service in the world.
