Safaricom Ethiopia’s market share has hit 5.5 percent in just under two years of operation in the country, having grown its subscriber base to 4.6 million users by the end of June.
Disclosures made by State-owned telco Ethio Telecom in a prospectus for its ongoing initial public offering, put its subscriber base at 78.3 million users, translating to a 94.5 percent market share.
The two firms are the only operators in Ethiopia, which only liberalised its telecommunications market in 2019 before issuing Safaricom’s consortium an operator licence in 2021.
Safaricom had earlier disclosed its subscriber numbers as of June in a quarterly report, but this report did not indicate the market share in the absence of the rival operator’s customer totals.
“Until October 2022, the company (Ethio Telecom) was Ethiopia’s sole telecommunication services provider and is currently the most dominant player, with its total subscriber base of 78.3 million, translating to a 94.5 percent market share as at June 30, 2024,” reads the Ethio Telecom prospectus in part.
“Safaricom is the second entrant into the market, having received the telecommunication and mobile money licences in 2021 and 2023, respectively. The minority player in the market, Safaricom had a total subscriber base of 4.6 million as at June 30, translating to a market share of 5.5 percent.”
Ethio Telecom, which is wholly owned by the Ethiopian government’s strategic investment arm Ethiopian Investment Holdings (EIH), is selling a 10 percent stake to private investors in an IPO that opened last week and runs until January 3, 2025.
Despite the liberalisation of the Ethiopian telecommunications sector, participation in the IPO is limited to Ethiopian citizens, physically present in the country.
Safaricom’s entry into the market came amid wider efforts to reform Ethiopia’s economy to bring in more foreign investment, including in the financial sector.
In August 2023, Safaricom Ethiopia went live with its mobile money platform M-Pesa, and by June 2024 the service had signed up 5.75 million customers, and 29,200 mobile money agents.
The 90-day active customers of Safaricom Ethiopia’s mobile data services stood at 3.21 million, voice at 3.82 million, and SMS at 2.21 million.
In the three months ending June 2024, the total revenue from the Ethiopia unit stood at Sh2.33 billion, with mobile data revenue the biggest contributor at Sh1.59 billion.
For the year to March 2024, the unit’s total revenue stood at Sh7.02 billion, where mobile data contributed Sh3.9 billion.
As a startup operation, Safaricom Ethiopia is expected to base its performance on revenue and customer growth before becoming a profitable business in the longer term. The company anticipates that the business will become profitable within four years.
Safaricom Plc has a majority stake of 51.7 percent in the Ethiopia business, with other shareholders in the consortium being the Japanese trading company Sumitomo Corporation (25.2 percent), British International Investments (10.1 percent), International Finance Corporation (7.25 percent) and Vodacom— Safaricom’s biggest shareholder— at 5.75 percent.
