Despite ongoing conflict in Ethiopia, ICT and telecommunications firm Safaricom is confident of its plans to operate in the country and has stipulated a Capex investment target of between US$1.5-billion and US$2-billion in the first five years.

The company announced its target in its H1 FY22 results and remains upbeat about the Ethiopian market, although conflict could delay plans to begin operations by mid-2022, according to its licence.

Safaricom CEO Peter Ndegwa said: “We are looking forward to launching commercial operations as projected, while cognisant of the current evolving political conflict in Ethiopia, as we proceed with our plans adapting to and assessing the situation as it evolves.”

“We hope for a fast and peaceful resolution to the current situation and we remain committed to taking telecommunications and digital services to the people of Ethiopia,” he added.

Despite the setback, Ethiopia represents a clear opportunity for Safaricom to expand.

The government’s clear intention to open up the economy, a huge population (median age at 17 years), growing GDP per capita (average at 7% over the last 7 years) are some of the metrics that hold promise for telecommunications growth.

Safaricom has stressed that the country’s low penetration of services - with telecommunications at 43% and mobile financial services at less than 2%, makes it an attractive market.

M-Pesa bounces back

The scrapping of zero-rated mobile money transfers for amounts under Kshs 1,000, has buoyed the company’s growth in revenue.

“M-Pesa revenue recorded strong performance growing 45.8% YoY in H1 FY22 following the return to charging at the beginning of January 2021,” the company reported. M-Pesa netted Kshs 16.4-billion during the period.

However, M-Pesa wallet to bank and bank to M-Pesa wallet transactions continue to be free but only account for 18.1% of the total value of M-Pesa transactions.

Total M-Pesa transaction value grew 51.5% YoY to Kshs 13.7-trillion while the volume of transactions grew 42.0% YoY to 7.3 billion, the company stated.

The adoption of its M-Pesa super app continued recording 3.9 million users.

Voice revenue increased 3.2% YoY while messaging declined 18.3% in H1 FY22, the company reported with data bundle customers growing by 8.1% YoY to 17 million, recording Kshs 1.4 billion during the period.

Overall service revenue grew by 16.9% YoY to register Kshs 138.4 billion in revenues.