Despite Ethiopia’s ongoing conflict, ICT and telecommunications firm Safaricom is confident in its ambitions to operate in the country and has set a Capex investment target of between US$1.5 billion and US$2 billion over the first five years.
The company announced its target in its H1 FY22 results and remains optimistic about the Ethiopian market, although conflict could delay plans to commence operations by mid-2022, according to its licence.
“We are looking forward to commencing commercial operations as planned, while cognizant of the current developing political conflict in Ethiopia, as we proceed with our plans adapting to and assessing the situation as it evolves,” said Safaricom CEO Peter Ndegwa.
“We hope for a fast and peaceful resolution to the current situation, and we remain committed to delivering telecommunications and digital services to the people of Ethiopia,” he added.
Despite the setback, Ethiopia represents an obvious opportunity for Safaricom to expand. Some of the metrics that hold promise for telecommunications expansion are the government’s clear intention to open up the economy, a large population (median age of 17 years), and growing GDP per capita (average of 7 per cent over the last seven years).
Safaricom has emphasised that the country’s low service penetration – with 43 per cent for telecommunications and less than 2 per cent for mobile financial services – makes it an attractive market.
The scraping of zero-rated mobile money transfers for amounts less than US$ 8,90 has aided the company’s revenue growth.