Vodacom Group, which owns a stake in Safricom Ethiopia, recently published its annual integrated report for the year ending March 31, 2022 .
Major Steps Taken in FY 2022
The report notes that the Safaricom Ethiopia transaction along with its planned expansion in Egypt, mark major steps in diversifying their connectivity offering, optimizing their assets through sharing costs and accelerating fibre reach to help bridge the digital divide.
These deals are said to advance the Group’s strategic ambitions and will diversify and materially enhance the Group’s growth and returns profile.
In FY2023, the Group’s footprint is anticipated to further expand as it acquires a controlling stake in Vodafone Egypt and launches commercial operations in Ethiopia.
It’s deals in Egypt and Ethiopia – each with populations exceeding 100 million people – are expected to provide transformational opportunities for its financial services business. The Group’s population reach across the continent is also expected to increase to over half a billion people and more than 40% of Africa’s GDP.
Goals for Safaricom Ethiopia
The Group has a 6.2% direct stake in the Safaricom-led consortium Safaricom Telecommunications Ethiopia Plc (STEP), which is rolling out mobile services in Ethiopia. Additionally, the Group has indirect exposure through Safaricom’s 55.7% effective interest in STEP.
The Group anticipates launching commercial services in FY2023 and looks forward to building a world-class network
in Ethiopia that will unlock its economic potential and build a positive future for people across the country.
The Group’s Medium and long term ambition for Safaricom Ethiopia
- US$1.5 – 2.0 billion investment in capex over the next 5 years.
- Network rollout of 10 000 to 12 000 sites in the next 10 years.
- Safaricom Ethiopia to reach EBITDA break-even in 4 years and an EBITDA margin of 40% in 10 years.
The Group plans to achieve its ambitions through:
- Aggressive network expansion.
- SIM card penetration.
- Mobile money product launch.
The Group’s Short term ambition for Safaricom Ethiopia
Short term priorities FY 2023:
- Build and scale a world-class telecoms network in Ethiopia.
- Acquire a mobile money licence for Ethiopia.
As per Vodacom Group, the Ethiopian licence unlocks a unique opportunity for the consortium to build out world-class services in Africa’s second- largest country by population, providing a long-term growth vector for Safaricom.
Having completed their test first call and data session, the consortium is proceeding with its plans for operational readiness and expects to launch commercial services in CY2022.
