Safaricom to challenge Ethio Telecom’s TeleBirr with own M-Pesa
Safaricom Ethiopia is to challenge incumbent operator Ethio Telecom with its own mobile money platform, M-Pesa.
The decision to launch M-Pesa means Ethiopians will have two rival mobile money systems in a country that still has relatively low penetration.
The company, part of the Vodafone/Vodacom family in which Kenya’s Safaricom is the main shareholder, said the government of Ethiopia has approved the launch of M-Pesa, though it still needs to get a licence as a mobile payment service provider from the National Bank of Ethiopia.
This appears to be a significant breakthrough for Safaricom, as the original understanding was that Ethiopian law did not allow foreign investors to operate in the Ethiopian financial sector.
The National Bank of Ethiopia is planning to amend the Payments Act, a move that will allow foreign investors to offer mobile money services in the Ethiopian telecom market.
Ethio Telecom, as a 100% state-owned company, launched TeleBirr, its mobile money service, in April 2021, working with Huawei as the systems provider.
In its last annual figures, published at the end of July, Ethio Telecom said TeleBirr had 21.8 million subscribers, with a total transaction value of 30.3 billion birr ($575 million).
That implies an average spend of just $26 per subscriber, potentially leaving Safaricom plenty of room for competition.
Safaricom Kenya launched M-Pesa in 2007, and since then it has expanded to Democratic Republic of Congo (DRC), Egypt, Ghana, Kenya, Lesotho, Mozambique and Tanzania, with a total of more than 604,000 active agents.