Safaricom Averages 30K New Customers Daily in Ethiopia

Safaricom Ethiopia executives were in high spirits this week as the telecom operator marked four years of operations while reaching a 10 million 90-day active subscriber base. CEO Wim Vanhelleputte, who has helmed the private telecom service provider for two years, said they were within their target timeline and plan to break even on investments within the next 12 months. Speaking to the media at Safaricom headquarters, the CEO revealed that they were now averaging 30,000 new subscribers daily.

After spending around 300 billion Birr over four years, the telecom operator, majority-owned by Safaricom PLC, has managed to cover a significant part of Ethiopia’s landmass with a tower network of above 3,100 sites. Wim indicated plans to double the company’s network coverage and grow its subscriber base to above 15 million by next year. The telecom operator, which competes with the majority state-owned Ethio telecom for market share, is also gearing up to introduce a slew of new services in the coming months, including device financing.

“We have now secured our supply chain to have locally assembled handsets,” Wim told Shega.

He explained the importance of locally assembling the devices by noting that the Company’s investments are in foreign currency while their revenue is generated in Birr. The CEO disclosed that Transsion, a Chinese phone maker which opened its first African facility in Ethiopia, would be one of their partners.

“We will be able to provide handsets through device financing which will be paid for in Birr, “he noted.

Ethio telecom, which offers over 300 products and services, has also began offering device financing services recently. However, Safaricom CEO pins market success not just on the quantity of products and services but also on the quality. 

Wim emphasized that delivering accessible financial services is key to meeting the company’s short-term goals, adding that they are currently focusing on savings and loans through their mobile money platform, M-Pesa.

“Many people have bank accounts, but they can't get a loan,” he said. “There is extremely high demand for credit access.”

Leveraging AI to power its credit scoring, the telecom operator looks to provide uncollateralized microloans to customers. In Kenya, MPESA, through its partnerships with financial institutions like KCB, provides various types of loan products. The KCB M-PESA provides customers to save as little as KSh. 1, and access credit from KSh. 100 payable within a month. 

Safaricom Ethiopia is managing to cement itself as a formidable presence in the mobile data space with a growing customer base attracted by quality and speed. Nonetheless, the CEO pointed out that internet bundles remain cost-inefficient despite the industry needing about 500 billion Birr additional investment for complete national coverage. 

“You need profits to be able to invest,” Wim said. “Our desire is that the market gets rationalized.”