News: #Ethiopian Communications Authority extends deadline for second telecom license

The Ethiopian Communications Authority (ECA) has extended the submission deadline for the country's second full-service telecommunications license by 20 days, raising concerns about the authority's ability to meet its end-of-2023 target.

The ECA received requests from investors to extend the deadline, pushing it from 15 September to 6 October.

#Safaricom Ethiopia became the second telecom operator in May 2021.

https://addisstandard.com/news-ethiopian-communications-authority-extends-deadline-for-second-telecom-license/

Safaricom Ethiopia registers 1.2 million M-PESA customers since launch in August, transaction values reach $286.7 million

#Safaricom_Ethiopia Plc has achieved a significant milestone by registering 1.2 million M-PESA customers since launching its mobile money service in the country in August this year. This announcement was made during the release of the company's 2023/2024 half-year results on Thursday.

On 16 August 2023, M-PESA was launched in #Ethiopia after acquiring the payment instrument issuer license from the National Bank of Ethiopia. This launch was a major boost for Safaricom as it aims to expand its services in one of #Africa's most populous countries.

Furthermore, Safaricom disclosed that transaction values have reached $286.7 million (Ksh. 43.7 billion) since the launch. Additionally, 23,000 M-PESA agents and 12,000 merchants have been onboarded to the service.

"This confirms our belief in the growth potential of Ethiopia and how it will greatly support our future expansion. We intend to maintain this momentum in the second half of the year," stated Peter Ndegwa, CEO of Safaricom.

During the results announcement, Safaricom also revealed that its customer base has grown to 4.1 million users, with operations now extended to 22 cities across the country.

https://techtrendske.co.ke/2023/11/09/safaricom-now-has-1-2-million-m-pesa-customers-in-ethiopia/

#Ethiopia: Economic turmoil, instability curtail Ethiopia’s FDI inflows: Ernst & Young report

Ethiopia's foreign direct investment (#FDI) has seen a significant decline amid global economic shifts and domestic challenges, as Ernst & Young's recent report reveals. The 2022 analysis shows Ethiopia at its lowest investment level in years, securing just six projects, a $600 million investment, and creating only 600 jobs. This is a stark contrast to the pre-pandemic period when Ethiopia was among the world's fastest-growing economies.

Neighboring East African countries, on the other hand, have fared much better, with #Kenya and #Uganda attracting substantial investments and job creation. Despite Ethiopia's government claiming a robust FDI of $3.4 billion for the fiscal year 2022/23, Ernst & Young's findings indicate a significant downturn from 34 projects in 2019 to merely six in 2022.

Key investments include #Safaricom's decade-long $300 million annual commitment and the UK's #Marriott_Drilling Group's financing for geothermal power stations. However, the country grapples with balance of payment issues, risk of sovereign default, and high inflation, which have dampened the investment climate. The National Bank of Ethiopia reports some success in combating inflation, but the Ethiopian birr's depreciation continues to undermine investor confidence.

https://addisstandard.com/news-economic-turmoil-instability-curtail-ethiopias-fdi-inflows-ernst-young-report/

#Safaricom #Ethiopia loans hit $117m

Safaricom Telecommunications Ethiopia Plc raised its local borrowings to an equivalent of Ksh18.8 billion ($117.5 million) at the end of December 2023 as part of the diversification of its funding structure.

Disclosures by the company’s majority shareholder, Safaricom Plc, show that borrowings from the Ethiopian market rose from Ksh15.2 billion ($95 million) in June 2023. The telco says the operating unit’s local market borrowings are set at varying interest rates.

The operator first reported the Birr-denominated loans whose tenors averaged five years in the year ended March 2023 when the borrowings stood at Ksh12.8 billion ($80 million).

The domestic loans by STE have served to diversify funding for the Ethiopian operation away from just shareholder and equity and third-party borrowings.

https://www.theeastafrican.co.ke/tea/business/safaricom-ethiopia-loans-hit-sh18-8bn--4516604

Abiy Ahmed's visit a sign of improved ties between #Addis_Abeba, #Nairobi

Prime Minister of #Ethiopia, Abiy Ahmed is set to make a visit to #Nairobi this week, marking his first State visit since President William Ruto assumed office. Sources indicate a significant improvement in relations between Nairobi and Addis Abeba. While Abiy had previously refrained from direct engagements, Ruto's visit to Addis Abeba, where he launched the #Safaricom_Ethiopia, signaled a thaw in relations.

Initially, tensions rose as Abiy felt slighted by Ruto's announcement regarding #Kenya's role in mediating the Tigray conflict without consultation. However, subsequent efforts by Ruto to mend fences have led to the forthcoming visit, facilitated by diplomatic dialogue under the Joint Ministerial Commission.

This visit holds strategic significance, addressing security concerns and fostering economic cooperation, notably Ethiopia's interest in accessing the sea via #Lamu_Port. Recent agreements focus on overcoming Non-Tariff Barriers and enhancing infrastructure to bolster trade relations.

https://nation.africa/africa/news/abiy-ahmed-visit-kenya-improved-ties-addis-ababa-nairobi-4537034#google_vignette

Business: #Safaricom bets big on #Ethiopia’s digital future

Safaricom Ethiopia is betting on the East African country's digital future, which the business feels will be critical to generating growth.

This is according to Safaricom Group CEO Peter Ndegwa, who spoke at Safaricom's second ‘Investor Day’ in #Addis_Abeba, last week.

The investor day, themed "Scaling Operations for Ethiopia's Digital Future," attracted 150 delegates, including analysts, regulators, government representatives, Safaricom Kenya and Safaricom Ethiopia board members and senior management.

"Our focus on scaling operations for Ethiopia's digital future has been instrumental in driving our growth, and we remain committed to leveraging our expertise and resources to continue establishing ourselves as a key player in the Ethiopian telecommunications landscape," Ndengwa said.

Adil Khawaja, board chairman of Safaricom, said: "Ethiopia represents a significant growth market for Safaricom.”

https://itweb.africa/content/Kjlyr7wB3j4vk6am

#Safaricom #Ethiopia set to outpace #Kenyan operations

Safaricom's Ethiopian subsidiary, launched just two years ago, is on track to surpass the company's long-established Kenyan operations in several key metrics within the next few years. This growth is fueled by an aggressive network expansion and strategic focus on tapping into the vast Ethiopian market potential.

Within 15 months of commercial rollout, Safaricom Ethiopia has already acquired over 4 million customers, deployed 2,200 sites across 33 cities, and achieved 33% population coverage. In comparison, the Kenyan unit has built 6,300 base stations over two decades. Significant capital investments were made in the Ethiopian unit last year, highlighting the company's commitment.

With Ethiopia's population more than twice that of Kenya and a sizeable unbanked population, Safaricom sees opportunities to scale mobile financial services like M-Pesa.

https://www.standardmedia.co.ke/business/financial-standard/article/2001490914/safaricom-ethiopia-set-to-surpass-kenyan-operations

Cash dominance a barrier to M-Pesa uptake in #Ethiopia

#Safaricom Ethiopia's #M_Pesa faces hurdles in penetrating the market due to the prevalent use of cash, particularly for small transactions. Despite banking penetration in urban areas, 99% of small transactions are still conducted in cash, hindering M-Pesa's growth.

Since its launch in August 2023, M-Pesa garnered 1.1 million customers, processing transactions worth Ksh43.7 billion ($29.13 million) with 12,400 active merchants. However, cash remains king in Ethiopia, as reported by the #World_Bank, contrasting sharply with neighboring #Kenya's digital payment trends.

The social construct favors informal money transfers, posing a challenge for M-Pesa's town-to-village transfers. Moreover, low financial service penetration, with only 11% accessing loans, underscores the struggle. Ethiopians largely rely on informal savings and borrowing from friends or family.

Safaricom aims to overcome these obstacles through strategic partnerships, including local banks and international money transfer services. Initially focusing on consumer payments, M-Pesa plans to expand to merchant payments and financial services like micro-credit.

https://www.theeastafrican.co.ke/tea/business/cash-dominance-a-barrier-to-m-pesa-uptake-in-ethiopia-4550786

M-PESA #Safaricom partners with #Onafriq, enabling the flow of remittances to #Ethiopia

#M_PESA Safaricom has forged a groundbreaking partnership with Onafriq, Africa's leading digital payments network, to facilitate international money transfers, particularly benefiting Ethiopia. Onafriq, operating across 40 #African nations, brings a vast digital infrastructure to the table.

M-PESA, renowned for its user-friendly financial services accessible via mobile phones, now extends its reach to Ethiopia, allowing individuals to receive remittances worldwide without the need for a bank account, just a Safaricom sim card. This move follows approval from the National Bank of Ethiopia (#NBE) in 2023.

With sub-Saharan Africa witnessing a surge in remittances, reaching $54 billion in 2023 according to the #World_Bank, Ethiopia stands out as a significant recipient, with over $5 billion flowing in annually. Paul Kavavu, General Manager at Safaricom Ethiopia, expressed enthusiasm, highlighting the partnership's role in simplifying payments and providing a formal channel for the Ethiopian Diaspora to support their families back home.

https://www.electronicpaymentsinternational.com/news/m-pesa-safaricom-partners-with-onafriq-enabling-the-flow-of-remittances-to-ethiopia/

#Safaricom annual profit below projections due to #Ethiopia losses

Safaricom Group Plc reported lower than anticipated annual profit as the Kenyan telecommunications company's subsidiary in neighboring Ethiopia incurred losses in its first full year of operations.

Net income increased by 1.2% to 63 billion Kenyan shillings ($480 million) in the year through March, the company announced on Thursday in Nairobi. This figure was below the 67.6 billion shillings forecasted by analysts.

"Ethiopia is in an investment phase, and such a large greenfield project with substantial investments is expected to generate losses," stated Chief Financial Officer Dilip Pal during an investor briefing, while highlighting the company's strong domestic performance. "#Kenya's performance is exceptional."

Ethiopia's annual operating loss amounted to 45 billion shillings, according to Chief Executive Officer Peter Ndegwa. For the current financial year, this figure is projected to range between 43 billion shillings and 46 billion shillings.

https://www.bloomberg.com/news/articles/2024-05-09/safaricom-annual-profit-misses-forecasts-on-ethiopia-losses?srnd=all

Vodacom profit hit by #Ethiopia start-up loss, upgrades revenue target

Vodacom Group reported a 10.8% decline in full-year earnings, impacted by start-up losses in Ethiopia and rising costs. However, the company upgraded its group service revenue target due to its #Egyptian unit's performance and growth in new services.

The South African firm, majority-owned by Britain's Vodafone, co-launched #Safaricom Ethiopia in 2022 as part of a consortium. It anticipates the populous nation will drive growth after approximately five years of investment.

Headline earnings per share fell to 846 cents in the year ended March 31, from 948 cents a year earlier. Group CEO Shameel Joosub cited "a combination of start-up losses in Ethiopia, higher finance and energy costs, the impact of absorbing inflationary pressures, and weaker exchange rates across markets" as contributing factors.

https://www.reuters.com/business/media-telecom/south-africas-vodacom-profit-hit-by-ethiopia-losses-2024-05-13/

#Safaricom eyes Sh19bn debt in #Ethiopia money

Safaricom PLC is planning to raise up to $150 million (Sh19.6 billion) in local currency debt in Ethiopia once the country's securities exchange becomes operational in the third quarter of 2024. This amount translates to approximately 8.6 billion Ethiopian Birr at the current exchange rate, which the company intends to raise through the issuance of local currency-denominated bonds starting from September.

Safaricom's CFO Dilip Pal stated that while going public via listing may not be feasible for Safaricom's Ethiopia subsidiary at present, the company is closely monitoring opportunities in the debt market for capital raising. Mr Pal expressed the company's interest in the emerging bond market, indicating that their financing needs could range from $100 to $150 million equivalent, which they may raise over time rather than in a single instance.

Recently, Safaricom PLC has intensified efforts to reduce its exposure to foreign currency-denominated debt, due to the significant depreciation of frontier market currencies such as the #Kenyan shilling and the Ethiopian Birr. This depreciation negatively impacts companies' performance by increasing finance costs.

https://www.businessdailyafrica.com/bd/corporate/companies/safaricom-eyes-sh19bn-debt-in-ethiopia-money--4629558

#Safaricom Ethiopia seeks $350 million loan from #IFC for network expansion

Safaricom #Ethiopia, a subsidiary of #Kenya's Safaricom Plc, is set to receive an additional $350 million loan from the International Finance Corporation (IFC) to support the expansion of its telecommunications network and mobile money services in Ethiopia. This loan will supplement the $157.4 million debt and $100 million equity investment that IFC made in the telco last year.

If approved, the total financing from IFC and its partners to Safaricom Ethiopia will amount to $607.4 million. IFC plans to lend between $150 million and $200 million, with the remaining balance to be sourced from development finance institutions and other lenders. The global private sector financier stated that the initial investments have had satisfactory environmental and social performance, enabling the proposed additional investment.

IFC expects that its expanded investments in Safaricom Ethiopia will further enhance the telco's ability to increase competitiveness in the mobile connectivity industry and improve access to quality phone networks in the country. Safaricom Ethiopia, the first private-sector-led mobile operator in Ethiopia, entered the market in 2021 following the government's liberalization of the telecommunications sector.

Since commencing operations in late 2022, the Ethiopian subsidiary has impacted its parent company's profits due to startup losses. In the fiscal year ended March 2024, Safaricom Ethiopia reported a net loss of $323 million, while the Kenyan arm posted a 13.7 percent increase in profits, reaching $642 million.


https://www.theeastafrican.co.ke/tea/business/safaricom-ethiopia-eyes-new-350m-loan-from-ifc-4634050

#Safaricom_Ethiopia to use locally manufactured telecom towers

Safaricom #Ethiopia has announced that it will be using locally manufactured telecom towers as it seeks to localize its infrastructure.

The telco has partnered with Woda Metals, an Ethiopian-based company that specializes in the production of Power transmission towers, Telecommunication towers, Cables, Galvanization and Steel Structures for the provision of the towers.

Safaricom Ethiopia last week received 13 of the locally manufactured telecom towers out of the 68 it has ordered from Woda, the first Ethiopian local manufacturer of such towers.

“This is a historic moment for Safaricom in Ethiopia as we have started the localization of the manufacturing of our infrastructure,” Safaricom Ethiopia CEO, Wim Vanhelleputte said.

Safaricom Ethiopia hopes the new towers will help it expand its network and customer base which now stands at 4.4 million.

“The quality of their towers is good; their galvanization plant is the biggest in East Africa and their cost-effectiveness will enable us to expand our network more efficiently and effectively,” Wim stated.

https://techtrendske.co.ke/2024/05/28/safaricom-ethiopia-to-use-locally-manufactured-telecom-towers/

#Ethiopia leads East Africa in Foreign Direct Investment

Ethiopia emerged as the top destination for foreign direct investment (#FDI) in East #Africa in 2023, securing $3.3 billion, according to the United Nations Conference on Trade and Development (#UNCTAD). This surpasses #Kenya’s $1.5 billion and #Uganda’s $2.9 billion in FDI.

Key drivers of Ethiopia's FDI success include public-private partnerships (PPP) and direct negotiations with foreign firms. Notably, #UAE’s AMEA Power is set to develop a $600 million, 300 MW onshore wind project in the #Somali Regional State.

Ethiopia's new policies allowing foreign investment in digital payment systems also bolstered FDI. #Safaricom M-PESA Mobile Financial Services PLC received a license to provide mobile financial services last year, growing its user base to 3.1 million in just four months.

https://addisstandard.com/?p=44463