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Why Safaricom Will Not Operate M-Pesa For Its First Year Of Entry Into Ethiopia

In a historic move that saw Safaricom which is the leading telecommunications operator in Kenya spread its wings across the Kenyan borders, the company was finally handed a telecommunications license today on June 8th 2021 to operate in Ethiopia.

The ceremony which was conducted in the presence of President Uhuru Kenyatta and the Ethiopian Prime Minister Abiy Ahmed will see Safaricom invest over Ksh864 billion in Ethiopia in the next 10 years as it taps into a vast market of 112 million people.

But even with this license award, Safaricom will not be allowed to run its mobile money business operations for its first year of entry into Ethiopia.

Details that emerged prior to the award of this license had it that Safaricom will wait until May 2022 for it to roll out its mobile money operations in Ethiopia. This is basically because of the following two reasons;

1. To give Ethio Telecom a chance to prepare for the coming competition.

Prior to the entry of Safaricom into Ethiopia, the state-owned Ethio Telecom enjoyed monopoly in the Ethiopian telecommunications sector and it's obvious that things are not going to be the same as from today.

Then since the Ethiopian Government is aware Safaricom has a technological advantage when it comes to mobile money business, Ethio Telecom was given one more year to enjoy offering the same without competition even with the Presence of Safaricom as the state seeks to see that Safaricom doesn't crowd out their own firm in that sector.

Mind you, Ethio Telecom registered one million subscribers within a year after launching mobile money services and its expected that by May 2022, the firm will have accumulated an adequate subscriber base and slight advantage to face Safaricom.

2. The year will act as a "grace period" to monitor and evaluate Safaricom's conduct.

Ethiopians aren't sure of how this Safaricom entry in their market will turn out and that's why the mobile money business was delayed to give the authorities time to evaluate things like the telecommunications operator's stability and commitment to safeguarding the data of its citizens prior to giving it a go ahead to offer mobile money services.

Content created and supplied by: AustineBarasa (via Opera News )

Ethio Telecom Ethiopia Ethiopian M-Pesa Safaricom


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