Safaricom’s Kenya staff to help set up Ethiopia unit

Safaricom #ticker:SCOM will second its staff to run Ethiopia operations for products and network development that will help it gain market share that is in the hands of state-owned Ethio Telecom.

The telco, which alongside other partners is seeking to start operations next year, will then gradually reduce Kenyan expertise and inject into the local workforce as the business grows.

Safaricom’s operations in the horn of Africa country will be through an operating company that will have its own CEO, executive team and a full management team.

Safaricom CEO Peter Ndegwa said the telco is out to achieve a high network coverage in a market with more than 100 million people and a relatively lower uptake of mobile and internet services.

“We will need to second several people to be able to inject the level of expertise, both on the technology side, but also on the commercial side,” said Mr Ndegwa. “But quickly (we will) start to embed local talent, to ensure that their flavour of the business will start being Ethiopian. We intend to make sure that long term that business is truly Ethiopian.”

Safaricom reckons it will employ the strategies that saw it overtake Airtel Kenya, then operating as Kencell, in the mobile phone market nearly two decades ago

In Ethiopia, it will battle for the market with State-owned Ethio Telecom, which is a monopoly in Ethiopia.

Ethiopia has launched a tendering process for the proposed sell-off of a 40 percent stake in Ethio Telecom to private investors. Airtel Kenya pioneered mobile telecommunication in Kenya as Kencell but Safaricom joined later and overtook it using strategies such as strong and wide network coverage and per-second billing.

Safaricom chief finance officer Dilip Pal says the telco’s strategy in Ethiopia is to build a high-quality mobile network as opposed to just competing on price.

“The fundamental to our success in that market is building a great quality network. Once we do that, we believe that the digital services that we can offer to our customers will enable customer stickiness,” said Mr Dilip.

Mr Dilip said Safaricom will crown a strong network with financing plans for customers to acquire mobile phones as is the case with Kenya.

“From day one, we will make sure that (there is) the mix of the portfolio of device financing, attractive offers for customers to buy, going to our retail or they go to an open retail,” he said.