Safaricom licensed to launch M-PESA in Ethiopia as the group revenues hit Kshs 310.9 billion in 2023 financial year

Safaricom Telecommunications Ethiopia has been granted the license to operate mobile money services in Ethiopia. The licence comes seven months after the telco launched its commercial GSM services in the country.

The M-PESA license will open the country to the world’s largest mobile payment system and Africa’s largest Fintech, and the world’s first mobile money transfer system.

Peter Ndegwa, Safaricom CEO said: “We are excited that this is a great milestone following our entry into Ethiopia. This positions us to provide essential financial services to the Ethiopian population. We are looking forward to launch and roll out the service over the next few months.”

Prior to issuing the license, the National Bank of Ethiopia amended the National Payment Systems Proclamation to provide the necessary regulatory framework for foreign owned telecom operators to provide Mobile Financial services (MFS) in Ethiopia, done in consultation with the industry players in the country.

In compliance with Ethiopia regulatory environment, the subsidiary of Safaricom Telecommunications Ethiopia was set up with a 50million Birr ($900,000) initial capital and will offer mobile financial services under the brand M-PESA by second half of 2023.

M-PESA empowers over 30 million customers to transact, save or borrow money through their mobile phone. M-PESA catalysed financial inclusion in Kenya to 84% from a low of 26.7% in 2006 according to the 2021 FinAccess Survey and generated over Kshs 117.2 billion ($886 million) in revenue in the 2023 Financial Year.

He added: “Since the commercial launch in October, the brand is visible, deeply rooted in the Ethiopia and quickly becoming in every sense fabric of the society. The potential for Ethiopia is immense and we look forward to the future with optimism and excitement.”

In the period under review, Safaricom Telecommunications Ethiopia added close to 3 million customers and built a distributor network of over 114 outlets, delivered an award-winning premium quality network in 22 cities and regions; with close to 1,300 network sites and over 900 staff, 81% of whom are Ethiopians.

Ndegwa spoke during the announcement of the Full Year 2022/2023 results, which saw net income increase by 3.0% to Kshs 74.5 billion for Safaricom Kenya.

Safaricom increased its Group Service Revenue by 5.2% to Kshs 295.7 billion while the Group net income excluding minority interest declined by 10.6% attributable to expected start-up costs and investment in rolling out operations in Ethiopia within the year. Voice service revenue declined by 2.6% to KES 81.1 billion; mobile data revenue grew by 11.4% to Kshs 54.0 billion, while M-PESA revenue grew by 8.8% to Kshs 117.2 billion.

Ndegwa said: “We have delivered a solid set of results despite the tough operating environment occasioned by slowdown in business activity in an election year in Kenya, tough macro environment as well as change in mobile termination rates which impacted our voice revenues significantly. The business is stable and regained a strong positive momentum in the second half of the year. Looking into the future, we passionately believe that our business is well-positioned to support our customers and provide technology solutions as we transition into a purpose-led technology organization in line with our 5 YR strategy.”

In its latest financial results, the Safaricom Group (which includes the Ethiopia operation) reported Kshs 295.7 billion in Service Revenue (indicating a rise of 5.2%) while Voice revenue declined by 2.6% to stand at Kshs 81.1 billion. M-PESA revenues rise by 8.8% to stand at Kshs 117.2 billion; Mobile data revenue recorded an increase of 11.4% to stand at Kshs 54.0 billion; while the telco’s overall customer base stood at 45.9 million, recording an increase of 8.1% during the period under review.

Safaricom’s one-month active M-PESA customers rose by 5.2% to 32.1 million while the one-month active mobile data customers rose by 7.0% to stand at 26.1 million.

In terms of the Net Income, the Safaricom Group (excluding Minority Interest) saw a drop of 10.6% to return Kshs 62.3 billion during the period, while the Kenya operations – that is Safaricom Kenya – recorded a rise of 3.0% in its income, standing at Kshs 74.5 billion. Safaricom’s Operating Free Cash Flow also rose by 4.3% to stand at Kshs 115.7 billion.


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