M-Pesa To Land In Ethiopia: Here Is What We Know So Far

Safaricom is soon expected to venture into Ethiopia as discussions with the government continue which will see the telecommunications giant spread its wings to a population twice that of Kenya.

According to analysts from Genghis Capital, there exists huge potential for growth in the Ethiopian mobile money market.

Ethiopia has a population of over 112 million and it is estimated that 35.0 percent of Ethiopian adults hold a financial institution account comparing to 82.0 percent in Kenya.

Less than 1.0 percent of adults in Ethiopia have mobile money accounts compared to 73.0 percent in Kenya, depicting the vast potential the country is yet to tap into, with a country possessing over 41.9 million mobile subscribers.

However, regulation in Ethiopia limits the role of a telecom operator to an agent and certain key sectors enjoy state protection.

The current Prime Minister, Abiy Ahmed, has been pushing for multi-sector reforms, though, which is expected to open up the market and enhance competition.

Ethio Telecom, owned by the government, dominates the market with over 42 million customers and the state-run telecom, in its 3-year strategic plan, intends to install 4G networks in key regions and upgrade other network services.

The government is expected to issue a telecom license to two international telecoms, with Safaricom primed to be a beneficiary.

Despite this, Safaricom is likely to seek partnerships with Ethio-Telecom and regional banks, while leveraging on its M-Pesa platform, with the Telco business being shelved.

Following the appointment of a Chief Business Development Officer (CBDO) to drive the initiative, the company will be seeking a revenue-sharing model and we anticipate increased partnerships with the Kenyan banks who are also assessing the Ethiopian market.

Safaricom is Kenya’s telecommunications giant that over the years, has remained the leader in the mobile money sector through its M-Pesa platform as well as other services.

Read:

• M-PESA: The Centre of Mobile money that is disrupting how we use our cash
• This is How to Become an M-Pesa Agent with Safaricom