Safaricom’s (SCOM.NR) M-Pesa mobile money service went live in Ethiopia on Wednesday, in a boost to the Kenyan telecoms operator as it seeks to kickstart growth in one of Africa’s biggest economies.
Safaricom, which is part owned by South Africa’s Vodacom (VODJ.J) and Britain’s Vodafone (VOD.L), launched its voice and data network in the Horn of Africa country last year and has signed up more than 2 million active users.
Safaricom introduced M-Pesa in Kenya in 2007. The service has grown to become the company’s biggest moneymaker and is also offered in the Democratic Republic of Congo, Egypt, Ghana, Kenya, Lesotho, Mozambique and Tanzania.
“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.”
Safaricom became the first private telecoms provider in Ethiopia after the government in 2019 liberalised a sector that had long been dominated by the state-controlled Ethio Telecom.
The company is betting that Ethiopia, which has around 120 million people and one of Africa’s youngest populations, will power growth for years to come.
Analysts said the market offers enormous opportunities, but also requires huge investments that will put Safaricom under pressure to deliver quick results.
Safaricom’s core earnings fell by a fifth in the year to March 31, hit by the cost of starting operations in Ethiopia.
The company also faces stiff competition from Ethio Telecom, whose profits more than doubled in its latest financial year. In July, Ethio Telecom reported having more than 34 million subscribers to its mobile money service Telebirr.
Mobile money services are common in East Africa, allowing customers to send and receive money and pay for goods and services.