Kenya's Safaricom has hopes of Ethiopian market
Kenya's largest mobile phone operator Safaricom has eyes on the Ethiopian market even though there are no official plans yet for the privatisation of Ethio Telecom, Ethiopia's state controlled telecommunications monopoly. It is now hoped these might come after the general elections in Ethiopia. The elections were originally scheduled at the end of August but they have now been postponed because of the covid-19 pandemic.
Ethiopia is also expected to award two new licenses for multinational mobile companies but it is thought that only local companies will be allowed to offer mobile money transfer services.
Michael Joseph, who founded Safaricom in 1997, told The EastAfrican weekly that Safaricom, which is one of the most powerful companies in Kenya, has plans to invest in the Horn of Africa, now that it has completed the purchase of the money transfer system, M-Pesa, from Vodafone in a joint venture with South Africa's Vodacom.
M-Pesa, the mobile phone-based money transfer system, was first launched in 2007 and was at the time one of the most advanced digital money transfer and micro-finance systems in the developing world. It is used in many African countries including South Africa, Tanzania, Mozambique, Democratic Republic of Congo, Ghana and Egypt.
It is especially important for about 66 per cent of adults across Africa who do not have access to traditional branch banking systems. Digital money transfer services are also proving invaluable during the covid-19 crisis when branch banking is impossible.
There are plans that M-Pesa will now add other functions to its app, such as delivery services. The covid-19 crisis is also providing new growth opportunities for this type of digital business.
As from 1 April Safaricom has a new chief executive officer, Peter Ndegwa, previously managing director at Diageo Continental Europe. Michael Joseph, who stepped down in 2010, returned briefly as the interim CEO of Safaricom on the death of Robert Collymore in July 2019. Safaricom has over 30 million subscribers across the East African Community.