Ethiopia’s government welcomed M-Pesa as Kenya’s Safaricom became the first private operator in one of Africa’s largest telecommunication markets, as a result of officially launching its Ethiopian network on the 6th of October.
The state-owned Ethio Telecom, launched Telebirr last year -a mobile phone based financial service- to improve its growth by introducing cashless transactions. Until now it runs as a monopoly with 54 million subscribers using Telebirr in Ethiopia. Ethiopia is the second most populous country in Africa with a population of 118 million people. Now Safaricom Ethiopia being the only competitor to the state-owned Ethio Telecom tends to roll out services in 14 cities between April next year to be able to pull over 25 cities to meet 25% population due to its license.
The Competition Between the Telecoms
This is the first time Safaricom will be competing with another monopoly because they hold in the Telecom and mobile money sectors and also the first time of expanding outside Kenya. However, it has been seen that there is no significant difference between Safaricom’s voice, data, and SMS bundles prices and Ethio Telecom signaling that it may have wisely chosen a pricing war, but Safaricom seems superior in rapidly building out of its network coverage compared to Ethio Telecom which has been mostly complained about poor services, especially weak internet service.
On the other note, Ethio Telecom is getting ready to face the competition for the first time. It wants to grow subscribers from 10.3% to 73.5 million over the next year and last month it announced plans to stream live music and videos. Also in August, it launched 3 different new mobile financial services that were created in partnership with Addis-based Dashes bank.
How Safaricom Ethiopia remains to be seen
During the celebration of Safaricom’s launch, Safaricom Ethiopia was permitted to roll out M-Pesa as an award and Ethiopia would grant Safaricom’s mobile money license in a request for a deal. The Central Bank in Ethiopia also drafted a bill to pave the way for Safaricom to offer mobile money services because it’s a foreign investor.
This achievement had been ongoing for Safaricom Ethiopia for a while now and it affected the interest to grant mobile service to Telebirr. M-Pesa is now available in 9 different African countries and it’s a struggle to copy Kenyan success without the support of Safaricom.