Safaricom Ethiopia has made significant strides in the Ethiopian telecommunications market, capturing a 5.5% market share in just under two years.
By the end of June 2024, the company reported a subscriber base of 4.6 million users. This growth is impressive, especially considering the competitive landscape dominated by state-owned Ethio Telecom.
Ethio Telecom, Ethiopia’s sole telecommunications provider until 2022, remains the dominant player. The company currently boasts a subscriber base of 78.3 million users, translating to a commanding 94.5% market share.
These figures were disclosed in a prospectus for Ethio Telecom’s ongoing initial public offering (IPO), which opened recently and will close on January 3, 2025.
Safaricom’s Entry and Market Position
Safaricom officially entered the Ethiopian market in 2021 after being granted an operator license as part of Ethiopia’s efforts to liberalize its telecommunications sector.
The company further expanded its presence in 2023 by launching its mobile money platform, M-Pesa. As of June 2024, M-Pesa had already registered 5.75 million users, supported by a network of 29,200 mobile money agents.
Also Read: Safaricom Ethiopia poised to overtake Kenyan operations
Despite being a relatively new entrant, Safaricom is steadily building its customer base and increasing its influence in the Ethiopian market.
In the three months leading up to June 2024, Safaricom Ethiopia generated KES 2.33 billion in revenue, with mobile data accounting for the majority, contributing KES 1.59 billion.
For the financial year ending March 2024, Safaricom Ethiopia’s total revenue stood at KES 7.02 billion, with KES 3.9 billion attributed to mobile data services.
Also Read: Safaricom Ethiopia launches M-PESA, three months after obtaining operating license
Despite being in the startup phase, Safaricom Ethiopia is focused on growing both its revenue and customer base. The company anticipates reaching profitability within the next four years, marking its long-term commitment to the Ethiopian market.
Safaricom Plc holds a majority stake of 51.7% in its Ethiopian operations. The company is part of a consortium that includes Sumitomo Corporation (25.2%), British International Investments (10.1%), International Finance Corporation (7.25%), and Vodacom, Safaricom’s largest shareholder, which holds a 5.75% stake.
Safaricom’s Dominance in Kenya
While expanding in Ethiopia, Safaricom continues to hold a dominant position in its home market, Kenya. The company commands a 65.9% market share, far ahead of its nearest competitor, Airtel, which holds about 29%. Safaricom boasts a customer base of 49.02 million, with 37.70 million active customers.
This dominance is attributed to several factors, including Safaricom’s robust infrastructure, superior customer service, innovative offerings, and its proactive approach to network expansion and service enhancement.
