Safaricom Telecommunications Ethiopia & It’s Services

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October 21, 2022

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Business

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Ethiopia has granted the first private telecoms license in its history to an international group of telecoms operators known as “the Global Partnership for Ethiopia,” which will be able to compete with Ethio Telecom, a century-old Ethiopian telecom service provider that has been around predominately.

This remarkable decision hails its beginning, in January 2018, when the Federal Democratic Republic of Ethiopia’s Government, under the premiership of Prime Minister Abiy Ahmed, unveiled its plan for political and economic reform in Ethiopia. While the political reform pledged the revision or repeal of laws that severely restricted politics, the organization of free and fair elections, and the release of political prisoners; the economic reform, on the other hand, aimed to increase the competitiveness of the private sector and expand its role in the Ethiopian economy.

Fortunately, the International Finance Corporation i.e the World Bank continued to back the Ethiopian government’s homegrown reform agenda by providing a grant of $312.2 million and a credit of $187.8 million. Following this reform agenda, a gradual process of private-sector-led liberalization had begun in some important sectors that were predominantly state-led; this includes sectors of telecom, aviation, shipping, and logistics.

SAFARICOM TELECOMMUNICATIONS ETHIOPIA WINS ETHIOPIAN TELECOM LICENCE BID

The government implemented significant institutional and legislative reforms before the tendering process, which culminated in the adoption of the Communications Service Proclamation (No. 1148/2019) and the creation of a new, independent regulator, the Ethiopian Communications Authority. The tender then specifies the precise responsibilities and obligations, as well as the fundamental terms and conditions of an operating license under Ethiopian legislation. The Ethiopian Communications Authority then released 18 directives, rules, and guidelines aimed at preparing the Sector for liberalization.

Given that Ethiopia’s population of more than 100 million people represents one of the largest potentials in the digital economy for tech companies, numerous investors expressed interest once the country’s telecom industry was formally opened to private-sector competition. Accordingly, 12 bids were submitted by many well-known telecom operators from around the world, including South Africa’s MTN, Etisalat, Orange, and the Global Partnership for Ethiopia (including Safaricom, Vodacom, and Vodafone).

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Following a transparent bidding process, regulators then awarded the first private telecoms license in the country’s history to an international consortium of telecoms operators under the name, ‘the Global Partnership for Ethiopia’ with a license fee of $850 million.

ABOUT SAFARICOM TELECOMMUNICATIONS ETHIOPIA

Safaricom Telecommunications Ethiopia PLC, formerly called Global Partnership for Ethiopia, is a group of international telecom service providers led by Kenya’s Safaricom. In addition to Safaricom, the partnership also comprises Vodacom Group, Vodafone Group, Sumitomo Corporation, and CDC Group. With 55.7% of the company’s shares, Kenya’s Safaricom is the largest stakeholder. Other participants include South African Vodacom (6.2%), Sumitomo of Japan (27.2%), and the CDC Group (10.9%). The Ethiopian Government granted one of the two new telecommunications licenses to Safaricom Telecommunications Ethiopia, which submitted the winning offer of US$850 million, to run telecom services in Ethiopia. The company was awarded a 15-year license with the option of a 15-year extension.

SAFARICOM

Safaricom PLC is a Kenyan mobile network operator headquartered at Safaricom House in Nairobi, Kenya. It is the largest telecommunications operator in Kenya, and one of the most profitable companies in East and Central Africa. Safaricom originally operated as a division of Kenya Posts & Telecommunications Corporation. But in April 1997, it was established as a private limited liability company. In May 2000, Vodafone Group PLC acquired a 40% stake in the company, and in 2008, 25% of the company’s shares were made available to the general public through the NSE.

VODACOM

Vodacom Group Limited is a South African mobile communications company that offers a wide range of services, including voice, data, and messaging. The company, which has its roots in South Africa, has expanded its business to operate in Tanzania, the Democratic Republic of the Congo, Mozambique, Lesotho, and Kenya. The company provides its mobile network service to over a population of over 303 million people. Furthermore, the company provides business-managed services to companies in 48 countries through Vodacom Business Africa. Vodafone holds a 60.5% ownership stake in Vodacom.

SUMITOMO CORPORATION

Sumitomo Corporation, founded in December 1919, is one of the largest Japanese business groups. The diversified Corporation engages in a variety of commercial activities by utilizing its global network and Integrated Corporate Strength, as well as the confidence of businesses across numerous industries and customers, including the selling of a variety of goods and services, import and export, trilateral trade, and domestic and foreign business investment.

CDC GROUP

The Commonwealth Development Corporation (CDC), a development finance institution based in the UK, was founded in 1948 to assist investors by providing patient, flexible capital to support private sector growth and innovation. CDC presently collaborates with more than 1,000 companies in developing nations, and its total assets stand at £7.5 billion.

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SERVICES OF SAFARICOM TELECOMMUNICATIONS ETHIOPIA

Safaricom Telecommunications Ethiopia has quickly set up its local headquarters in Addis Ababa after receiving the first license in June 2021 and is getting ready to begin offering its services to Ethiopians.

In total, Safaricom invested $1 billion, including the license price paid to the Ethiopian government. It has invested in the network and building infrastructure and imported equipment worth more than $300 million, including its mobile radio towers, national transmission network, and wholesale agreements for international connectivity. With this significant investment, it is expected that Safaricom will implement best practices for managing infrastructure, operations, and cutting-edge technological capabilities.

Beginning in August 2022 in Dire Dawa, Safaricom Ethiopia carried out a successful ten-city pilot and a phased launch throughout Ethiopia. The company has conducted a series of customer network service trials in Dire Dawa on 2G, 3G, and 4G networks and in other additional places across the country for few months. Following this trial period, Safaricom Ethiopia, on October 6, 2022, switched on its mobile telecommunications network and services in Addis Ababa. In 11 cities, including Ethiopia’s capital city of Addis Ababa, Safaricom Ethiopia currently provides its customers with 2G, 3G, and 4G mobile services (data, voice, and SMS).

Customers in Addis Ababa can buy SIM cards, select their preferred numbers, purchase airtime, and get specialized customer support at the safaricom stores. These shops and stores can be found at Garad Mall, Meskel Flower, Jemo, Bole (in front of Selam City Mall), CMC (next to Gast Mall), and other telecom shops. Moreover, customers can reach the call center by dialing 700 and receive services in five different languages, which are: Amharic, Afaan Oromo, Af-Somali, Tigrigna, and English. In addition to launching its networks in Dire Dawa, Harar, Haramaya, Adama, Bahir Dar, Bishoftu, Mojo, Debre Birhan, Awoday, Gonder, and Addis Abe, the telecom company plans to expand its services to 14 more cities by April 2023 in order to reach a total of 25 cities and fulfill its obligation under its licence to cover 25% of the population.

Furthermore, the Ethiopian government, along with giving telecom licence, has also authorised Safaricom to run mobile money in Ethiopia. This was revealed by Ethiopia’s Minister of Finance at the ceremony held to celebrate Safaricom’s launch. The announcement came after Kenya’s President Ruto’s speech, during which he expressed confidence that Ethiopia would approve Safaricom’s request for a mobile money license. Accordingly, Safaricom, along with Ethiotelecom’s Telebirr, can work with another mobile money service named M-Pesa, which is a hugely popular mobile money service.

Safaricom Ethiopia will operate under the “07” prefix, as assigned by the Ethiopian Communications Authority, the same as how it does in Kenya. Furthermore, Safaricom has said that it had given SIM cards and bundle packages as gifts, enabling its customers to access the internet, voice call, and text messaging services for one month. Moreover, customers of Safaricom will be able to exchange calls and messages with Ethio telecom service subscribers as well as make international calls. Additionally, customers will have the option of purchasing airtime vouchers to replenish their airtime balance and keep enjoying the network’s services.