Safaricom has crossed the five million mark in subscriber numbers in the Ethiopian subsidiary, less than a year after its entry into the populous country where it is seeking to grab a significant market share with a goal of acquiring 10 million customers by the close of March next year.
The telco’s chief corporate affairs officer Stephen Kiptinness issued a confirmation on the numbers to the Business Daily.
“Yes, it’s correct,” Mr Kiptinness said in a text response to a query that sought an official validation of the subsidiary's performance.
Safaricom, which launched operations in Ethiopia on October 6 last year, started on a strong footing acquiring 740,000 subscribers by the close of the first month while generating Ksh98.3 million ($679,336) in revenue from the market during the period.
The firm would later in mid-November announce that it had crossed the one million mark in customer base. By mid-March this year, the subsidiary had amassed 2.8 million customers, meaning it has added 2.2 million users in five months to reach the current number, translating to an average of 14,600 sign-ups daily which speaks of a decline in the onboarding pace from the average of 18,000 daily sign-ups witnessed in the period between end of October and mid-November.
Safaricom, which is the major shareholder in the Ethiopian consortium which includes UK’s Vodafone, South Africa’s Vodacom, Sumitomo Corporation and British International Investment, is battling with the country’s State-owned Ethio Telecom (Ethiotel) to control the expansive market of 112 million people.
In its annual report for the full year ending June 2023, Ethiotel announced that its total subscribers had reached 72 million, which marked an eight percent increase from the number reported in the previous year.
Ethiotel’s customer numbers translate to the biggest single-country subscriber base of any nation on the continent.
Last week, Safaricom moved to launch M-Pesa operations in Ethiopia just three months after receiving the mobile money licence, with an eye on replicating the success that the platform has had in Kenya.
The firm targets to sign up at least two million customers on M-Pesa in the Ethiopian market by the end of the current financial year which is set to close in March 2024.
The telco plans capital expenditure of between Ksh40 billion ($276.4 million) and Ksh45 billion ($311 million) on the Ethiopia unit in the current financial year compared with Ksh55.6 billion spent in the financial year ended March 2023.
The Ethiopian subsidiary generated Ksh1.83 billion ($12.6 million) in revenue in the six months to March but the operating costs came in at Ksh19.95 billion ($137.9 million), contributing to a loss after tax of Ksh12.2 billion ($84.3 million).
Safaricom is betting on offering quality telecommunications and mobile money services to scale up its customer base to a profitable level.
It is also aggressively marketing its brand in the market where consumers have only had one provider for decades.
In Kenya, the telco was able to overtake Airtel Kenya and Telkom Kenya through heavy and sustained investment in infrastructure as well as innovations such as M-Pesa.