Safaricom to Partner With Vodacom On Expansion into Ethiopia
Safaricom recently released their half-year 2020 interim results reporting an impressive 14.4 % growth in net profit to Ksh 35.65 billion. Service revenue grew by 5.3% to Ksh124.3 billion attributed to the strong performance across M-Pesa and data segments of the business.
The firm announced that they are very keen to enter the Ethiopian market to explore opportunities in both the telecommunications and financial services.
“Ethiopia is the last price is the last big price in Africa in terms of telecommunications…..and everybody who is a mobile operator in the world will be looking at this opportunity including ourselves.” noted the telco’s interim CEO Michael Joseph in an exclusive interview with Kenyan Wallstreet.
Ethiopia is among the few telecoms markets in the worldwide that are still served by a monopoly. The Ethiopian government has recently begun the process of liberalizing the sector by inviting bidders for the licences as well as privatizing the State-owned monopoly Ethio Telecom. KPMG has been picked to guide the privatization process.
A study by Ethio Telecom shows that Ethiopia’s mobile banking can generate as much as KSh1.34 trillion ($ 13 b) by 2025. The Government has established a new agency to supervise and issue licenses in the mobile services industry as well as provide oversight in the telecoms space.
On The New Brand Strategy; Simple, Transparent and Honest
Safaricom recently launched its new brand strategy that aims to simplify its products across its entire operations. Mr Joseph believes that time is ripe for the telco to restrategize going forward – to account for anticipated growth while consolidating the gains already made in the telco’s 19 years of existence. The telco also intends to roll out countrywide 4G coverage before the end of the year.
M-Pesa Growth, IP Acquisition and opportunities
“Mpesa is a very important product for us and has grown to account for 35 per cent of our revenues,” says, Michael.
The CEO also revealed that they will be launching a number of services on Mpesa to serve both businesses and individuals. He further noted that Safaricom is actively in talks with the Central Bank of Kenya to increase the Mpesa transaction limits as they align operations to regulator’s concerns such as – funding terrorism, fraud and money laundering.
Mr Joseph noted that Safaricom, which owns the M-Pesa brand, is in negotiations with Vodafone to bring the management of Mpesa product (G2 platform, roadmap ) under a joint venture between Safaricom and Vodacom.
He says that once the platform is headquartered in Nairobi, it will enable economies of scale and further expansion of M-Pesa across Africa.
Mr Joseph is the founding CEO of Safaricom. He led the company between 2000 to 2010. In 2007 during his tenure, the telco launched M-Pesa, which has grown now become the most successful mobile money service in the world. He is currently serving as the interim CEO of Safaricom following the demise of Bob Collymore.
You can watch the full interview below;