Safaricom PLC has announced plans to launch mobile money in the federal republic of Ethiopia and make the unit its subsidiary.
In a public notice to shareholders on Thursday ahead of its full-year results, the telco said it has completed talks with the Ethiopian government on how to set up the mobile financial service.
"In compliance with applicable legislations, the consortium through Safaricom Ethiopia will set up a new entity, Safaricom ET MSF to acquire Payment Instrument Issuer License (PIIL) and will offer mobile financial services under the M-Pesa brand," the telco said in a notice.
It added that by virtue of holding the controlling stake in the consortium, the Ethiopian business will be a subsidiary of Safaricom PLC after shareholders' approval during the annual general meeting slated for July 29.
Safaricom started operations in the Ethiopian market in October last year, becoming the first private operator in one of Africa's largest telecoms markets.
State-owned Ethio Telecom had until then enjoyed a monopoly in Ethiopia, Africa's second-most populous country with an estimated 118 million people.
Safaricom is 35 per cent owned by the Kenyan government and 40 per cent by South Africa's Vodacom, while the remaining shares are publicly listed.
In 2021, as part of plans to revamp the telecommunications sector, Ethiopia issued a tender to award two licences to private telecommunication operators.
One licence was awarded to a consortium led by Safaricom, which offered $850 million and promised to invest $8.5 million over 10 years.
Ethiopia also launched the process for a sale of a 40 per cent stake in Ethio Telecom, but the plans have since been put on hold.
