Ethiopia’s finance ministry has said it expects new entrant Safaricom to launch it telecom services in the first quarter of 2022.
Senior Advisor at Ethiopia’s finance ministry, Brook Taye disclosed this during the Africa Tech Festival 2021 online event, saying Safaricom will start operations in March 2022.
This comes days after Safaricom cited ongoing unrest in the country among other things as potential risk factors to its take off and eventual success.
But Taye also confirmed the government is in the process of finalizing legislative changes to allow its central bank to issue the new entrant with a mobile money license.
Safaricom is leading The Global Partnership for Ethiopia consortium, which was issued with Ethiopia’s first private telecoms license earlier this year, having outbid MTN in the final stage of the lengthy sales process.
Ethiopia already has state-owned Ethio Telecom in place with a tender currently open for a third player to enter the market.
Risks
Taye’s comments came days after Safaricom CEO Peter Ndegwa provided an update on the project as part of its financial results statement.
During an investor call, Ndegwa outlined the potential problems for its new venture, though added: “opportunities outweigh the risks and the uncertainties. Largely because, the telecoms market liberalisation has been unquestionably positive and of value for countries across the world.”
He explained risks and uncertainties include the “ongoing political conflict” in the country, tax and regulatory framework issues, currency volatility, foreign exchange availability and potential infrastructure rollout problems such as securing access to buildings and concluding sharing agreements.
Ethiopia is currently in the midst of an armed conflict between authorities and anti-government groups in part of the country.
“We look forward to launching commercial operations as projected while cognizant of the current evolving situation in Ethiopia as we proceed with our plans adapting to and assessing the situation as it evolves,” Ndegwa added.
Safaricom estimates the venture will break even by its fourth year of operation with coverage obligations requiring $1.5 billion to $2 billion of capex to meet over a five year period.
