Business

Safaricom Ethiopia builds Sh34b war chest to boost expansion

Monday, February 28th, 2022 23:41 | By
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INVESTMENT: With a semblance of normalcy returning to Ethiopia after a period of internal wrangles and Covid-19 knocks, top Kenyan firms have started regrouping to make inroads in Africa’s second most populous nation.

Economic liberalisation has increased foreign participation in the country’s telecommunications, logistics, electricity and financial sectors, attracting leading Kenyan companies among them Safaricom, KCB Bank Equity Bank, as well as state electricity utility generator KenGen. Safaricom Telecommunications Ethiopia Plc has, for instance, has lined up a $300 million (Sh34.2 billion) financial war chest this year to build its mobile network infrastructure even as it prepares for an April 9 commercial launch.

Sections of the Ethiopian press quoted the firm’s Chief Legal and External Affairs Officer Mathew Harrison-Harvey as saying the telco has kick-started activities towards setting up the first data centre in Addis Ababa, with two more expected in the near term. “Our license states that operations may start nine months from the date of the license award, which is around about April this year. So starting early April, we are working towards our commercial launch,” he said during an interview with Capital.

Exchange rate

The Ethiopia arm of the telco which is a consortium between the UK’s development finance institution CDC Group, Vodafone and Japan’s Sumimoto Corporation paid $850 million (Sh91.75 billion current exchange rate) for its operating license in May last year.

It plans to spend another $8.5 billion (Sh968 billion) in the next 10 years to build and improve its network infrastructure.

“Besides the data centre, we are in the process of rolling out our network and mobile towers. We’ve had a lot of surveys on various lands and we are in talks with landowners, the federal and regional governments in regards to building our network,” Harvey said.

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