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Safaricom retains brand name in Ethiopia

The license which took effect July 9 will be valid for a term of 15 years

In Summary
  • Last week, the consortium appointed Anwar Soussa to manage the Ethiopian operations.
  • The country has indicated that it will allow mobile money license in about 12 months.
Safaricom house. FILE
Safaricom house. FILE

Giant telco, Safaricom, will operate under the same brand name in Ethiopia as it seeks to stamp its regional footprint.

This follows the issuance of a telecommunications operator license by the Ethiopian Communications Authority (ECA).

A statement from ECE shows Global Partnership for Ethiopia has incorporated and registered its local company Safaricom Telecommunications Ethiopia PLC.

“Pursuant to Articles 40 and 41 of the Tender Regulations, the Designated Licensee (Global Partnership for Ethiopia) shall incorporate a local company within forty-five 45 calendar,'' ECA said.

It added that the local company shall execute the Provisional License Agreement executed by the parent company within three (3) working days of the commercial registration date.

The license which took effect July 9 will be valid for 15 years from  renewable for additional terms of 15 years subject to fulfilment of all license obligations.

The award of the license comes two months after the Safaricom-led consortium that includes its parent firms Vodafone and Vodacom, British development finance agency CDC Group and Japan's Sumitomo Corporation won a $850 million (Sh92 billion)tender to operate in the landlocked nation.

Last week, the consortium appointed Vodacom DRC head and the chairperson of Vodacash (M-PESA), Anwar Soussa to manage the Ethiopian operations.

The Ethiopian manager will be reporting to the board and Safaricom Plc CEO Peter Ndegwa.

The leading Kenyan telco which commands 57 percent holding in the Ethiopian entity will now compete with a local sole mobile operator, Ethio Telecom, which launched a mobile phone-based financial service akin to M-Pesa in mid-May. 

Ethiopia has indicated that it will allow mobile money license in about 12 months, giving Safaricom an opportunity to extend its M-Pesa services in the country. 

The license award now sets the ground for the consortium to embark on market activities in the market amid uncertainties around a loan facility from a US corporation. 

Yesterday, the Business Daily reported that the US International Development Finance Corporation (DFC) was considering stopping$500 million loan (Sh53.97 billion) funding in protest against Ethiopia's civil strife violence against civilians in Ethiopia’s Tigray region.

The financing had earlier been thrown into doubt over US economic sanctions against Ethiopia related to the conflict in the northern Tigray region, which has killed thousands of people.

Safaricom has offered to invest $8 billion in Ethiopia over the coming ten years.