Safaricom’s M-Pesa mobile money service has launched in Ethiopia this week, in order to boost Kenyan telecommunications operator since it is looking to kick-start growth in one of Africa’s biggest economies.
Safaricom is part owned by South Africa’s Vodacom Group, and it went live with its voice and data network in the Horn of Africa country last year and has signed up more than two million active users. The company went on to introduce M-Pesa in Kenya in 2007. The service has grown to become the company’s biggest moneymaker and is also offered in the Democratic Republic of Congo, Egypt, Ghana, Kenya, Lesotho, Mozambique and Tanzania.
Stanley Njoroge who is Safaricom Ethiopia’s interim CEO, said M-Pesa is known to be a game-changer for financial inclusion. “We will continue to broaden the services our customers receive from the M-Pesa platform.” – he added.
The company went on to become the first private telecoms provider in Ethiopia after the government in 2019 liberalised a sector that had long been dominated by the state-controlled Ethio Telecom. It is betting that Ethiopia, which has around 120 million people and one of Africa’s youngest populations, will power growth for years to come.
Analysts have revealed that the market offers enormous opportunities, but also requires huge investments that will put Safaricom under pressure to deliver quick results. The core earnings of the company went down fell by a fifth in the year to 31 March, hit by the cost of starting operations in Ethiopia.
Safaricom is also having some challenges when it comes to competition from Ethio Telecom, whose profits more than doubled in its latest financial year. In July, Ethio Telecom reported having more than 34 million subscribers to its mobile money service Telebirr.
Mobile money services are common in East Africa, and allow customers to send and receive money and pay for goods and services.