Safaricom Ethiopia, the subsidiary of Kenya’s telecom giant, is experiencing explosive growth and is firmly on track to surpass its parent company’s operations in the next few years.
This meteoric rise showcases East Africa’s most profitable firm shifting its focus from Nairobi to Addis Ababa.
Unprecedented Network Expansion
In an astonishing feat, Safaricom Ethiopia has deployed over 2,200 sites across 33 cities within just 15 months of its commercial launch in 2022. “We take pride in our achievements, having launched over 2,200 sites so far in 33 cities, acquired over four million customers, and attained 33 percent population coverage within 15 months of our commercial roll-out,” said Safaricom Ethiopia Chairman, Michael Joseph.
Also Read: Safaricom Ethiopia launches M-PESA, three months after obtaining operating license
This impressive network coverage is already one-third of Safaricom Kenya’s 6,300 base stations built over two decades. The company invested a staggering Sh55.7 billion in capital expenditure for its Ethiopian operations in the year ended March 2023.
Skyrocketing Subscriber Base and Revenue Streams
Safaricom Ethiopia has already onboarded over 4 million customers, with a remarkable 3.1 million new M-Pesa customers as of December 2023, representing 10% of the total customer base. The vast unbanked population of over 120 million in Ethiopia presents an enormous opportunity for scaling up mobile financial services like M-Pesa.
“Three million Ethiopians turn 18 years old every year, which means every year we are adding the equivalent of one and a half the population of Lesotho as an addressable market in Ethiopia, so we have to be there,” explained Safaricom Ethiopia CEO Vim Vanhelleputte.
5G and Data-Driven Strategy
The company is aggressively testing 5G in Addis Ababa, with 25–30 live sites, and plans to rapidly roll out the latest network technology across the country.
“Over 18 months, we are building 125 sites every month, and we are also testing 5G in Addis where we have about 25 to thirty sites that are live,” said Vim Vanhelleputte.
Mobile data has emerged as a cornerstone strategy, with Safaricom Ethiopia reporting higher average usage per customer compared to Kenya. “Previously, we were going to market primarily through a product lens,” explained Safaricom Group CEO Peter Ndegwa, signaling a strategic shift in positioning and marketing digital services.
Leapfrogging Traditional Growth Trajectory
Safaricom Ethiopia aims to leapfrog the traditional growth journey by leveraging the existing business, data, and technological infrastructure from its Kenyan operations. “We have the whole gamut of products and services available, we just need to push a button,” said Vanhelleputte. “We have another lending and savings product that already runs in Kenya that we can easily copy-paste and leap-frog.”
“The point we have to understand is we have to leap-frog,” emphasized Vanhelleputte. “We are not on the traditional journey, we are on a leap-frogging journey, so we go straight into merchant payments, utility payments, government payments, savings and lending, and into using the app.”
Unparalleled Growth Potential
With Ethiopia’s population more than twice the size of Kenya, at over 120 million people spread across 1.1 million square kilometers, Safaricom Ethiopia has the potential to double, or even surpass, the impressive earnings reported by its Kenyan counterpart over the years.
Safaricom Ethiopia’s unprecedented network rollout, explosive subscriber acquisition, strategic focus on digital services, mobile financial solutions, and ability to leapfrog traditional growth barriers position it as a significant growth driver for the Safaricom Group in the coming years.
As the company continues to capitalize on the massive addressable market, with 3 million Ethiopians turning 18 every year, its operations in Addis Ababa may soon eclipse those in Nairobi.
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