•Previously, the legal framework didn't allow foreign operators to have mobile money.
•In April, the Ethiopian government switched up a national payment law to allow foreign investors to launch mobile money in the country.
Image: HANDOUT
Safaricom is eyeing Ethiopia's mobile money market as the populous nation finalises on laws allowing foreign firms to launch mobile money operations.
Speaking at the launch of Safaricom Ethiopia, the telco's chief executive officer Peter Ndegwa said informal talks are at an advanced stage.
"Previously the legal framework didn't allow foreign operators to have mobile money. We are grateful that significant progress has been made in addressing this," Ndegwa said.
In April, Ethiopia switched on a national payment law to allow foreign investors to launch mobile money in the country.
Safaricom currently connects more than 51 million customers to financial services through its M-Pesa platform across seven countries in Africa.
The demand for mobile money in Ethiopia is high as exhibited by launch if the service by state-owned Ethio Telecom which launched its Telebirr platform in May last year and has since reached close to 18 million customers.
The cumulative transaction value is $245 million, close to (Sh30 billion).
The landlocked nation is currently liberalising its telecoms sector to spur growth by rapidly digitising its economy.
Mobile money has become an integral tool for citizens of developing nations, relying on platforms to carry out daily duties such as bill payments and making purchases.
Latest report by Global System for Mobile Communications (GSMA) shows the sector has hit a milestone of $1trillion in global transaction values, and it is increasingly becoming integral to growth for business-to-business (B2B) and business-to-consumer (B2C) operations.
Yesterday, Safaricom Ethiopia switched on its mobile telecommunications network and services in Addis Ababa.
Safaricom Ethiopia’s 2G, 3G and 4G mobile services are now available in 11 cities including the capital and the country’s second-largest city Dire Dawa.
The network is 5G enabled in Addis but the firm will for a start only be switching on 3G and 4G.
The company plans to launch services in a total of 25 cities by April 2023 to meet the 25 per cent population coverage obligation under its licence.
Safaricom Ethiopia is building a wholly-owned mobile network but also has infrastructure sharing and interconnection agreements with Ethio Telecom.
Speaking during the launch, Safaricom Ethiopia CEO Shameel Joosub said $300 million (Sh36.3 billion) worth of equipment has been imported.
"We have signed an infrastructure sharing agreement with Ethio Telecom and have been granted access to the towers," Joosub said.
A Safaricom-led consortium obtained a licence to operate in the country in April.
It paid $850 million (Sh102.8 billion) to gain entry into the Ethiopian market, with the telco relying heavily on short-term loans to fulfil its part of the capital obligations.
President William Ruto and Ethiopia's Prime Minister Abiy Ahmed witnessed the launch.