Ethiopia’s government has stated that it will allow foreign telecom companies to launch mobile phone-based financial services. The announcement has set the stage for Safaricom to introduce its popular M-Pesa on the Ethiopian market.
Prime Minister Abiy Ahmed made the announcement on May 13 during the launch ceremony for Ethio Telecom’s telebirr, the state-owned mobile money transfer system.
According to Abiy Ahmed, the government forfeited $500 million by denying bidders competing for two licenses the right to roll out mobile financial services. The bidders in question included a subsidiary of the MTN Group and the Safaricom consortium.
Last year, the government shut down the mobile money transfer market to international firms, leaving in place telebirr’s monopoly. However, Abiy Ahmed said the mobile financial services will open to competition as of May 2022.
M-Pesa
On April 6, 2020, Safaricom and Vodacom acquired the popular mobile money platform M-Pesa from Britain’s Vodafone. The acquisition was made through a joint venture established by the telecom giants, The EastAfrica reported.
The group stated that the transaction will accelerate M-Pesa’s growth in Africa by giving Vodacom and Safaricom complete control of the M-Pesa brand, product development, support services and the opportunity to expand M-Pesa into new African markets.
On April 28, Safaricom’s share price reached an all-time high of about Ksh 39.9 ($ 0.37) per share as news spread that Safaricom was close to securing an operating license in Ethiopia.
The group sold 11 million shares worth Ksh 441.7 million ($4.13 million) at an all-time high of Ksh 40.2 ($0.38).
The latest news is likely to stir another bull run in Safaricom shares on the Nairobi Stock Exchange in the coming days.
