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Safaricom CEO during the release of half year results for the 2021/2022 Financial Year.

Kenya

Safaricom says plan to start operations in Ethiopia on course

NAIROBI, Kenya, Nov 11 – Safaricom Chief Executive Officer (CEO) Peter Ndegwa says the firm’s plan to launch commercial operations in Ethiopia is on course despite the political uncertainties necessitated by the ongoing Tigray conflict.

Ndegwa said Safaricom Ethiopia PLC, a subsidiary of Safaricom PLC,  is already setting up operations ahead of the commercial launch scheduled for mid-2022 even while he admitted that the “telco’s breakeven targets may be impacted by the current conflict .”

Ndegwa said the firm had hoped to break even into the country by year four of operations.

“We are in contact with relevant authorities, we are confident in launching commercial operations while cognizant of the current evolving situation and adapting to it as it evolves,” he said during an investor briefing.

“The firm’s priority is the safety and security of the few employees who are already there,” he added

Ndegwa further expressed confidence that a quick resolution will be made to enable the firm leverage on the Eastern African country’s projected GDP rates coupled with the high sim card penetration rate.

” We remain committed to taking the services to people of Ethiopia,” he said.

Among the risks posed by the firm’s entrant in Ethiopia, Ndegwa added, is the implementation of market liberalization and new regulatory frameworks.

“The opportunities outweigh the risk because the Telcom market liberation has been unquestionably positive, from our experience, the liberalization of Ethiopia’s telecommunications market will be of value,” Ndegwa added.

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Ethiopia had granted an operating license to a consortium of firms including Kenya’s Safaricom, Vodafone, and Vodacom, a move that will end the state’s monopoly over its stunted telecoms sector.

The shake-up of the potentially lucrative sector — currently dominated by state-owned Ethio Telecom — is a cornerstone of Prime Minister Abiy Ahmed’s economic reform agenda.

 

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