Safaricom shareholders give nod for Ethiopia expansion
Safaricom PLC Chief Executive Officer Peter Ndegwa
Safaricom shareholders on Friday gave the greenlight for the telco’s entry plan into Ethiopia after the consortium it is leading incorporated a local operating unit that will start operations in the Horn country by next year.
Safaricom Telecommunications Ethiopia PLC was set up early this month after the Global Partnership for Ethiopia (GPE) consortium was awarded a licence to set up telecommunications services in Ethiopia.
The consortium is 56 per cent owned by Safaricom, 6.2 per cent by Vodacom, 25 per cent by Sumitomo, the Japanese conglomerate, and 10 per cent by the UK sovereign investment fund, CDC, and plans to invest up to $8.5 billion (Sh918 billion) in telecoms infrastructure among other areas over the next decade.
Anwar Soussa was early this month appointed managing director of the Ethiopia unit, after being picked from the helm of Vodacom DRC. He will lead setting up of the new company, and will report to the Board of Safaricom Ethiopia and Safaricom chief executive Peter Ndegwa.
The new entity becomes only the second telecoms operator in the populous country, and the first private entity to be licensed by Ethiopia in the populous country’s first major step to liberalise its communications sector that has a mobile penetration of just 46 per cent.
Speaking at the AGM, Safaricom board chair Michael Joseph said the company is primed to build a top quality mobile network in Ethiopia to open the Horn country to more digital services.
“The board is committed to working with management to deliver value to our shareholders but, most importantly, to ensure we continue to be there for our customers, staff and the community, especially in this new phase,” said Mr Joseph.
Mr Ndegwa, while marking his full financial year at the helm of the company, said Safaricom’s entry is a crucial start in the company’s expansion plan.
“Ethiopia is a critical part of our strategy under mergers, partnerships and acquisitions. We are proud to lead this partnership that will provide quality and affordable mobile and internet connectivity to enable more Ethiopians to access quality telecommunications services,” he said.
“Even as we start operations in Ethiopia, we pledge to continue investing in our country, ensuring we always offer our customers superior network connectivity and efficiently enhance our network, products and services,” he added.
Ethiopia aims to attract 21 million new mobile phone subscribers in the first year of opening up the telecoms space to competition, eventually rising to 33 million in five years.
At the same time, Safaricom shareholders will earn Sh1.2 billion less this year after the company’s Board declared a final dividend of Sh0.92 per share, amounting to a Sh36.86 billion payout during its annual general meeting on Friday.
