Battle for Ethiopia’s mobile money market begins as Safaricom’s M-Pesa takes on TeleBirr


The mobile money platform, the largest in Africa, will take on incumbent operator Ethio Telecom’s own fintech service, Telebirr

This week. Kenyan operator giant Safaricom has launched their M-Pesa mobile money platform in Ethiopia.

The move marks a key part of newcomer Safaricom’s Ethiopian strategy, seeking to replicate the success that their M-Pesa already enjoys in numerous markets across the African continent.

M-Pesa was first introduced by Safaricom in Kenya in 2007. Since then, the service has grown almost exponentially, expanding into six additional African markets and processing transactions worth over three times Kenya’s GDP every year.

Safaricom grows Ethiopian subscriber base

The consortium now known as Safaricom Ethiopia (at the time called ‘The Global Partnership for Ethiopia’) first entered the market back in 2021, having paid the government $850 million for a mobile operating licence.

Since then, the company has been racing to rollout mobile infrastructure, as well as signing a network sharing deal with incumbent Ethio Telecom in April 2022 to begin offering services across the country.

Today, the company’s own infrastructure covers over 21 cities, with the company having attracted over two million subscribers.

The path to launching their own mobile financial services, however, has been less clear.

A rivalry brewing with Ethio Telecom’s TeleBirr

Launching M-Pesa in Ethiopia was one of the key attractions for Safaricom in battling for a mobile operating licence, with the country’s population of 120 million presenting extraordinary potential for revenue growth. However, the company was restricted from launching M-Pesa immediately, with the Ethiopian government forcing them to wait a year in order to give incumbent Ethio Telecom a chance to launch their mobile money platform first.

This Ethio Telecom did in 2021 in the form of TeleBirr, allowing customers to make cashless transactions using their mobile device, including sending and receiving money, depositing and withdrawing cash from selected locations, paying bills, and receiving cash sent from abroad.

With no local competition, TeleBirr quickly racked up customers in Ethiopia’s mobile money space, earlier this year reporting roughly 34 million active users of its platform. In the six months from July 2022 to January 2023, the platform reportedly processed roughly $3 billion in transactions, generating around $1.5 million in revenue for Ethio Telecom.

The scale of TeleBirr’s lead in the Ethiopian market should not be underestimated – M-Pesa’s entire user base across all seven of its existing markets is roughly 53 million users.

Nonetheless, the addressable market in Ethiopia continues to grow at an impressive pace, with Safaricom noting M-Pesa’s role as a key enabler for expanding financial inclusion, just as it has done in Kenya.

“M-Pesa is known to be a game-changer for financial inclusion,” said Stanley Njoroge, Safaricom Ethiopia’s interim CEO. “We will continue to broaden the services our customers receive from the M-Pesa platform.”

Next steps for Ethiopia

The Ethiopian government is only part way through its telecoms liberalisation journey, with plans to sell off a 40% stake in Ethio Telecom recently drawing attention from major international operators, including Orange and e&.

The government has also indicated that it still has plans to relaunch an auction process for an additional telco operating licence in the country, potentially increasing the number of national operators from two to three.

However, both the stake sale and the licence auction have been delayed numerous times, both by the global economic situation and civil unrest in the country’s Tigray region. Even now, with the economy somewhat more settled and the cessation of hostilities, no concrete timeline has been proposed for either process.

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