Safaricom, the leading telecommunications service provider in Kenya, is gearing up to launch its operations in Ethiopia next month as it aims to capitalise on the surging demand for mobile network services in the East African nation.
Citizen Digital quotes the company as saying that its network in Ethiopia will comprise its own infrastructure alongside wholesale agreements and infrastructure shared with State-owned rival Ethio Telecom.
The network operator further revealed that it outlined a phased launch of its network and services in August 2022 in Ethiopia’s city of Dire Dawa before expanding to 24 cities across the country in April 2023.
“The first beneficiaries of the telecommunication services launch will be in Dire Dawa- a city in Eastern Ethiopia near the Oromia and Somali Region border,” Safaricom said during a press briefing in Addis Ababa Thursday.
“We are committed to building the long-term foundations for our contribution to Ethiopia’s digital transformation geared towards transforming lives for a digital future,” said Safaricom.
Ahead of the launch, Business Insider Africa gathered some fascinating information about Safaricom’s growth projections.
According to Vodacom Group's growth forecast, which is contained in its latest annual financial report, Safaricom Ethiopia is expected to break even in four years following its commercial launch in 2022. In addition, the company is expected to record Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) margin of 40% in just 10 years.
"Safaricom provided an update on our Ethiopian consortium, noting an improved outlook for the security and political situation in the country. The licence unlocks a unique opportunity for our consortium to build out world-class services in Africa’s second-largest country by population, providing a long-term growth vector for Safaricom," said a part of the report by Vodacom Group.
These projections are quite ambitious, especially the one about EBITDA margin. That's because Safaricom Plc, established in 1997, currently has an EBITDA margin of 51.7%; after 25 years of operations. So, it would be interesting to see its subsidiary actualise a 40% EBITDA margin in 10 years.
Safaricom has made significant investments in the Horn of Africa country in preparation for the anticipated launch. In February, the company unveiled its multi-million dollar data centre, which was constructed by Nokia and Huawei. It has also reached agreements with both Ethio Telecom and Ethiopian Electric Power to either share or lease telecom tower assets and dark fibre optic infrastructure.
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