Ethiopian mystery as Safaricom misses launch deadline

Ethiopian mystery as Safaricom misses launch deadline

Safaricom data centre.jpg

Ethiopia’s new competitive telecoms operator has missed its deadline for launch, and is not giving any information about a new date.

Safaricom Ethiopia, in which Safaricom Kenya is the main shareholder, was due to launch on 9 April – last Saturday – but services have so far failed to appear.

“Thank you for taking an interest and writing to us. We will be providing an update on our launch plans in the coming days,” said Tewedaj Eshetu, PR and communications manager, in an email to Capacity on Monday. Others repeated the same phrase, including from Vodafone’s group headquarters.

But none of them have yet given any reason for the delay in launching services.

Meanwhile the company’s website is down, bearing only a message saying it is “under maintenance”. And so is that of the regulator, the Ethiopian Communications Authority (ECA). It says: “The website is undergoing scheduled maintenance. Sorry for the inconvenience. Come back a bit later, we will be ready soon!”

Safaricom’s social media outlets, such as Facebook, LinkedIn and Twitter, have also gone quiet, or added innocuous posts – none addressing the question of the launch date.

Matthew Harrison-Harvey, the company’s chief external affairs and regulatory officer, told Capacity in March that 9 April will mark nine months since Safaricom was awarded its 15-year licence. That was intended to be the launch date, he said in an interview that will appear in the April-May issue of the magazine.

Safaricom Ethiopia has spent $1 billion so far of its planned $8.5 billion spend over 10 years, he said. “Everyone knows the size of the project.” The company has spent money on infrastructure, including data centres (pictured).

A year after launch, the service should be available to 25% of Ethiopia’s population. “It’s a national licence with national coverage obligations,” said Harrison-Harvey in the interview.

The ECA has not replied to Capacity’s enquiry, either directly or via its director general, Balcha Reba.

Safaricom Ethiopia is part of what it calls “the Vodafone family”. Safaricom Kenya, 35% owned by Vodacom and 5% by Vodafone, owns 55.7% of the Ethiopian start-up. Vodacom itself has 6.2%.

Sumitomo of Japan has 27.2% and the UK government – via its aid agency, CDC, now called British International Investment – owns 10.9%.

The delay will inevitably give a revived Ethio Telecom, still 100% government-owned, the chance to continue its development. The state monopoly, as it still is, reported earlier this year that it achieved only 86.4% of its target in the last half of 2021, though that was 6.7% up on the same period of 2020.

But it has used the imminence of competition to introduce its own telebirr mobile money service, which now has over 13 million subscribers, said CEO Frehiwot Tamiru. The total value of telebirr transactions so far is 5.1 billion birr, equivalent to $103 million – rather less than $1 per head of population.

Ethio Telecom has launched rebranded retail outlets and started a fixed home broadband service ahead of Safaricom’s launch.

And the Ethiopian government last month delayed plans to sell off a 40% share in Ethio Telecom, giving the incumbent financial and management stability while it prepares for Safaricom’s arrival.