Ethiopia: Safaricom to launch M-Pesa mobile payment service by September
July 25th 2023
The main active mobile money service in Ethiopia is Telebirr from the incumbent operator Ethio Telecom. Launched in May 2021, the service currently has 34.3 million subscribers.
Telecom operator Safaricom Ethiopia is expected to launch its M-Pesa mobile money service before the end of the semester ending in September. This was disclosed by Vodacom Group Limited, a member of the Global Partnership for Ethiopia consortium, in its financial results for the first quarter of fiscal year 2024 ended June 30.
It was last May that Safaricom obtained an operating license for M-Pesa about seven months after launching its commercial mobile services in Ethiopia. In return, the operator paid $150 million to the National Bank of Ethiopia (NBE).
M-Pesa represents a strategic issue for Safaricom in the context of the development of its activities in the Ethiopian telecom market currently dominated by the incumbent operator Ethio Telecom. As of June 30, 2023, the latter had 72 million subscribers, including 34.3 million subscribers to the Telebirr mobile payment service launched in May 2021. In addition, a second private telecom operator should soon enter the market. .
To achieve its objectives, Safaricom Ethiopia can rely on the experience and international reputation acquired by its parent company Safaricom in Kenya. The company has already carried out a precise identification of the market that is opening up to it while taking into account the current financial inclusion rate of 35%. Ethiopia has about 119 million inhabitants, of which 63 million are over 18 years old and 13.5 million between 14 and 18 years old. The country also has 10,000 large enterprises and 240,000 micro, small and medium enterprises.
As a reminder, the Global Telephone Operators Association (GSMA) estimates that mobile money adoption in Ethiopia is expected to reach nearly 60% of adults over the age of 18 by 2030. In this case, the mobile money could lift 700,000 people out of poverty, add $5.3 billion to Ethiopia’s GDP, increase tax revenue by $300 million, and cushion the economic shocks experienced by nearly 40% of Ethiopian households.
Source: Agence Ecofin Back