Safaricom-led consortium to introduce mobile money service in Ethiopia

Ethiopia has cleared the path for Safaricom-led consortium to launch its popular M-Pesa in the Ethiopian market after deciding to include the mobile phone-based financial services in the telco’s license offered in May.

According to the Business Daily Africa website, the Ethiopian authorities have stated that the license – making the consortium the first new operator in the country to rival with state-run Ethio Telecom – will be upgraded when bidding for the second telecoms operator license, due to open this month, is over. This is a rerun of bidding for the second license after the only bid made was deemed to be too low.

The terms for the second license have been adjusted and now includes mobile financial services in order to attract higher bids. It is generally assumed that the low bid received for the second license inspired a change of mind on the right to operate such services, which had formerly been withheld from new entrants to the market. This decision has forced the Ethiopian authorities to rethink the terms of the earlier award.

It has now been stated that the second license process will not disadvantage the previous winner. This not only means that what is allowed for the second licensee will also be allowed for the first licensee but that both licensees will have the chance to start providing mobile financial services at the same time.

But both new entrants will have some catching up to do. State monopoly Ethio Telecom, which launched a new mobile financial service called Telebirr in May, was said in some reports to have signed up six million customers by early July.