Safaricom to begin operations in Ethiopia next year

Leading Kenyan telecom operator Safaricom and its partners have planned to kick off commercial operations in Ethiopia next year.

The consortium which won a telco license bid over the weekend has the new operational web structure as revealed by the new company disclosures made on Tuesday. 

Vodafamily Ethiopia Holding Company, a firm incorporated in England and in which the local outfit holds a 90 per cent stake, has been established by Safaricom. 

Other shareholders of the SPV are Vodacom International Limited (10%), a single share by Vodafone International Operations, 

It will move to Kenya under the name Safaricomfamily Ethiopia Holding Company Limited and hold a 61.9 per cent stake in the Global Partnership for Ethiopia B.V. (GPE), an entity domiciled in the Netherlands.

Meanwhile, GPE will own a newly incorporated operating company in Ethiopia to be named the Opco.

Safaricom stated, “As Safaricom will directly or indirectly hold more than a 50 per cent equity stake in each of the consortium companies, each such consortium company will become a subsidiary company of Safaricom.” 

The telco license will be for an initial term of 15 years with the right to apply to the Ethiopia Communication Authority (ECA) for an additional 15 years.

Safaricom will hold a 55.7 per cent in the Opco,  the Japanese Sumitomo Corporation will hold 27.2 per cent, CDC Group Plc will hold 10.9 per cent and Vodacom will hold 6.2 per cent.

Safaricom stated, “Ethiopia represents an attractive new market for Safaricom to expand into given that Safaricom operates in a neighboring country and sees the opportunity to deploy similar solutions to help overcome the challenges that both countries have in common,” added Safaricom.

“Safaricom looks forward to growing its business outside Kenya and to providing the Ethiopian consumers with world class services that Safaricom and its operating consortium members are renowned for,” the telco added.