Safaricom Bids to Enter Ethiopia

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Safaricom, a Kenyan mobile network operator, is bidding for one of the two telecommunications licenses up for grabs in Ethiopia.

Safaricom, which has had its sights on Ethiopia for some time now, yesterday on June 11, 2020, said it has put in an expression of interest. A Kenyan Based newspaper, The Standard, had quoted Chief Executive of Safari Peter Ndegwa saying “Safaricom, together with other partners, has expressed interest and we will give an update at some point on the progress.”

A few months ago the Telecom giant has expressed its interest in the Ethiopian market and issued a statement to the Nairobi Securities Exchange saying that it is looking for partners for the Ethiopian venture.

Safaricom, which is 35% owned by Vodacom, bid for the market entry license as a consortium estimating the high cost of entering the Ethiopian market, around one billion dollars in license fees and network costs.

Late last month Ethiopia’s Communication Authority invited international firms to bid for the two licenses to enter Ethiopia following the decision by the Ethiopian government introduce competition into the telecoms market and to privatize the current monopoly operator, Ethio Telecom.

The deadline for companies to show interest in a telecoms license is set for 22 November 2020 and other international companies are expected to bid for the spot. The license will be awarded by April 2021.

Ethiopia is one of the few remaining market opportunities for international telecoms and the country is attractive to foreign firms such as Safaricom owing to its huge population of over 100 million people.

According to its latest annual report of Safaricom, for the year 2019, the company had total revenue of 2.47 billion dollars and earned profit before tax of 900 million dollars. Safaricom together with South Africa’s Vodacom co-owns M-Pesa, Africa’s largest mobile money service.

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